Although P2P has several advantages, such as total control over the process, it also has some risks that could result in the total loss of your crypto asset and funds.
1. Slower Transaction Speed
Once your payment is confirmed, traditional crypto exchanges conduct crypto transactions almost instantly. However, peer-to-peer trading introduces a new risk: slower trading speeds. Cryptocurrencies are volatile, and you can profit from price fluctuations, but a delay in processing transactions can result in a loss.
2. Low Liquidity
P2P may not be the best option for high-volume traders because there is often less liquidity, and as a result, high-volume traders may have to contact several buyers or sellers before completing their transactions. As a result, high-volume traders prefer over-the-counter (OTC) trades or purchasing directly from a standard exchange with higher liquidity.
3. Crypto scams
P2P trading has given rise to several crypto scams, in which individuals have lost money due to fraudulent individuals operating under the guise of crypto trading. For example, after receiving funds from your account, they may claim that they have not seen the funds and thus refuse to release your crypto assets.