What are the Risks?
The volatility of cryptocurrencies is primarily responsible for the trading risks. You should be aware of the risks before you begin trading because they are a high-risk and unpredictable.
- They are unstable: sharp and rapid fluctuations in price might result from unanticipated changes in market sentiment. Cryptocurrency values sometimes plunge by hundreds or even thousands of dollars in a matter of seconds.
- They are not governed: governments and central banks do not presently control cryptocurrencies. But recently, they have begun to get greater notice. For instance, it is debatable whether to include them in the category of commodities or digital currencies.
- They can be hacked and are prone to mistakes: technical flaws, human mistake, and hacking cannot all be completely avoided.
- Forks or discontinuance may have an impact: trading cryptocurrencies comes with added risks including hard forks and termination. Prior to trading these items, you should familiarize yourself with these dangers. When a hard fork happens, there can be a lot of price fluctuation surrounding it. If we don't get accurate pricing from the underlying market, we might halt trading throughout the event.
We'll try to let you know if there are any potential blockchain splits. But ultimately, it's up to you to make sure you learn when things could happen.
Before you begin trading, be sure you completely comprehend all the risks involved. If you are a seasoned investor with thorough understanding of the financial markets, only invest. Trading cryptocurrencies might not be suitable for everyone. Before choosing to begin spread betting or CFD trading, we advise that you, if required, get independent expert counsel.
CFDs and spread betting are governed by the FCA. This implies that companies that provide CFDs and spread bets on cryptocurrencies must be approved by and under the FCA's supervision. Individual complaints may be sent to the Financial Ombudsman Service (FOS), and Financial Services Compensation Scheme (FSCS) is available to consumers who qualify. These safeguards, however, won't make up for any trading losses you could incur.