Cryptocurrency And It’s Challenges
Cryptocurrency market is gaining huge popularity day by day. The market sees a lot of new investors trading causing the trading volumes of the market go up as high as trillions of dollars. The cryptocurrency has captured a huge capital in the finance market in a very less duration and is expanding with every passing day. Though all this true, the cryptocurrency have their own share of challenges and issues. A few of these challenges are as mentioned below:
1) Price Volatility: Cryptocurrency market is highly volatile causing frequent ups and downs in the cryptocurrency prices. Sometimes the cryptocurrency market even notices about 49% fall in the cryptocurrency prices in as less as 24 hours. There are various reasons for the frequent price changes, one of the major reasons been the “whales” manipulating the prices of these virtual currencies. Whales in cryptocurrency markets are the traders with a huge share of these cryptocurrencies. These whales can manipulate the price changes without even entering the markets. They sometimes open a buy position on one of the crypto trading exchanges worth millions of dollars. This prompts the regular traders to think that the prices of these digital currencies are going up, causing the prices to actually go up. This is a frequent scenario causing the prices to keep going up and down. The reason behind this is there is no limit on the price of the position on many exchanges. An appropriate limit on the position price will discourage a movement in the buy and sell positions.
2) Hacking and Cybercrimes: The cryptocurrencies have faced the hacking and cybercrime issues since its evolution. There are a vast number of high-profile cryptocurrency hacking cases that have bought in a loss of millions of dollars. Many traders have lost a huge amount in these hacks and thefts even causing some exchanges to stop its working altogether. As a result, the prices of the related cryptocurrencies came down drastically.
In order to stop this from happening the traders and exchanges have to take a lot of precautions. But it does not always solve the problem. The major issue here is to safeguard the digital currency that is stored in the digital wallets. Traders prefer to store their cryptocurrency in offline wallets in order to prevent them from theft, but this delays the process of trading as the traders bring their currency from offline wallets to an online wallet for trading.
Another issue with cryptocurrency is the frequent scams in the trading robots. If not chosen correctly the traders can lose their investments to scams. There are a few good options to choose from like the Crypto Code, read its full review.