Investing in cryptocurrencies carries a high level of volatility risk. The value of cryptocurrencies has fluctuated since they were released. Bitcoin's price, for example, surpassed $1,000 for the first time in 2017, soared to a record high of more than $19,000 by year's end, and then fell to around $3,000 a year later. The cryptocurrency reached new highs in October 2021, reaching approximately $66,000.
While it may be difficult to comprehend, you should almost always focus on areas of expertise. Before purchasing a stock, it is important to know what the company does and how it makes money. Because cryptocurrency is digital, it may be difficult to understand. Before buying any, you may want to familiarize yourself with blockchain technology and the various principles underlying cryptocurrencies.

Cryptocurrency has gained popularity, but it also comes with several disadvantages. One major drawback is volatility, as prices can swing dramatically within minutes, leading to unpredictable gains or losses. Security risks are another concern, since hacking, scams, and lost private keys can result in irreversible losses. Regulation is still uncertain in many countries, making it risky for investors who lack legal protection. Cryptocurrencies are also not widely accepted as a payment method, limiting their practical use in daily life. High energy consumption from mining, especially with Bitcoin, raises environmental concerns. Additionally, the lack of centralised oversight makes it difficult to resolve disputes or recover stolen funds. These challenges make cryptocurrency a risky and often unstable investment option.