Risks of crypto trade : Volatility Risk

• Crypto prices can fluctuate dramatically in minutes or hours.

• Impact: Can lead to rapid gains or losses, liquidating leveraged positions.

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🏛️ 2. Regulatory Risk

• Governments may ban, restrict, or heavily regulate crypto.

• Impact: Sudden loss of market access or devaluation of tokens.

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🕵️‍♂️ 3. Security Risk

• Risk of hacks, phishing, or private key theft.

• Impact: Funds can be stolen, with little to no recourse.

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🔓 4. Custody Risk

• “Not your keys, not your coins.” If you store assets on an exchange, you don’t control them.

• Solution: Use cold wallets (Ledger, Trezor) for long-term holdings.

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💥 5. Leverage & Margin Risk

• Trading with borrowed funds can magnify losses.

• A small drop can trigger forced liquidations, wiping out accounts.

• Tip: Use leverage only with strict stop-losses and risk controls.

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👥 6. Market Manipulation

• Crypto markets, especially small-cap tokens, are vulnerable to:

• Pump-and-dump schemes

• Wash trading

• Whale manipulation

• Impact: Prices may not reflect real demand/supply.

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📉 7. Liquidity Risk

• Some tokens have low liquidity — it’s hard to buy/sell in large volumes without affecting the price.

• Tip: Stick to well-known tokens unless you’re an advanced trader.

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🧠 8. Emotional & Psychological Risk

• Fear and greed dominate the crypto market.

• Retail investors often buy tops and sell bottoms.

• Tip: Stick to a clear trading plan and avoid FOMO.

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📜 9. Project/Token Risk

• Some tokens fail due to bad tokenomics, scams, or poor execution.

• Red flags: Anonymous teams, no clear use case, unsustainable yields.

• Impact: Token can go to zero.

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🌍 10. Macro & Systemic Risk

• Global events (like inflation, war, or interest rate hikes) affect all risk assets, including crypto.

• Correlation with traditional markets has increased in recent years.