THECRYPTO.WATCH – Almost every day, the number of crypto asset investors is increasing. Apart from making a profit, of course there is crypto investment risks.
So far, the impact of crypto asset trading on financial system stability in Indonesia is still limited, according to Bank Indonesia. The number of crypto asset transactions is also considered to be still small compared to stock transactions. However, BI will continue to monitor the development of the impact due to the prominent risks of crypto investments.
The Risks of Crypto Investment
Many investors just join in on investing. Some investors may not understand what the risks of investing in digital assets are.
It is better before investing in crypto, potential investors also understand the risks of investing. The volatility of cryptocurrencies and their high volatility should be taken into consideration. Moreover, crypto investments must also be in the long term in order to give maximum results.
According to Bank Indonesia, there are several crypto investment risks to watch out for, they are:
Market risk due to asset price volatility without an underlying transaction. Valuation will be difficult.
Credit risk, which occurs if the funds used to invest come from loans from financial institutions.
The risk of disintermediation, which arises because it is in line with shifting the use of funds for investment purposes in crypto assets. The impact that occurs is a decrease in financing for the real sector, if the transaction value grows significantly.
Besides, according to Bank Indonesia, there are also a number of risks that arise from expert observations regarding crypto investment. The absence of guarantees and the opportunity for fraud or embezzlement of funds is one of the risks that must be considered.
For those who are interested in investing in crypto, first you should learn what this investment is. High cyber crime will make investors lose their investment entirely. In 2019 there were a record number of cases of hacking accounts on exchanges that were successfully broken into.
One way to minimize crypto investment risk is to ensure that the money used for investment is unused money. The money is not from a loan or that would otherwise be used to fund other needs. Make sure you are really ready to lose the money.