It’s no secret that you can make a huge amount of money with Bitcoin and cryptocurrency as a whole. Cryptocurrency can encompass a wide range of currencies, but most people are familiar with Bitcoin, which some would argue sent this method of investing into the mainstream. 

However, before you invest, you may wonder whether these cryptocurrencies, such as Bitcoin, are safe. 

The Risks

Every investment comes with a measure of risk, and Bitcoin is no exception. To begin with, cryptocurrencies are incredibly volatile. This is how some people have managed to earn incredible amounts of money so quickly, but others have suffered losses as well. 

But one of the most concerning risks involving cryptocurrencies is that of cryptocurrency crime. When money is around, crime always finds a way to get involved. The most common types of crime surrounding cryptocurrency are hacking and fraud. 

One common scam is the rug pull, where a development team abandons a project before completion, taking the investor’s funds with them. Other schemes involve asking for an ICO (initial coin offering) for a non-existent currency. Or, a small group of investors may falsely inflate the price of a specific currency, then sell it in bulk once other investors have gotten involved.  

Hacking is another concern surrounding cryptocurrency. The whole idea of crypto is that everything is digital, which makes it potentially accessible to anyone with the know-how to do so. 

Mitigating Risk

Does the risk of Bitcoin and other cryptocurrencies mean that you should shy away from the potential opportunities that they offer? Well, not necessarily. Cryptocurrency is a high-risk, high reward deal, and there are plenty of success stories where people have earned a fortune overnight that can encourage you to give it a go.

Many of the risks mentioned above can be mitigated, with a bit of effort on your part. The first thing to remember is that you should always do your research. Check on the trends and read up on the best strategies for dealing with cryptocurrency. 

If you invest in a relatively well-known and developed currency, such as Bitcoin, and ensure that you get it from a respected source, then you can reduce your chances of getting scammed. This means that you can take advantage of the relative sustainability of Bitcoin. 

If you do choose to invest in a lesser-known or new currency, then research the developer and make sure that everything looks legitimate. While you’re at it, secure your cryptocurrency in a trusted crypto wallet and make sure that it’s in a safe place with robust security. 

Many wallets store your currency online, which leaves it somewhat open to hackers, although different services have different levels of security. You should consider cold storage, where your currency is stored offline and can’t be easily accessed.

Of course, you can’t completely mitigate the risk of cryptocurrency, or any investment. Many financial experts recommend a diversified portfolio, which consists of more secure, long-term investments as well as cryptocurrency. But with the right research and strategies, you can reduce the risks and improve your chances of building a sturdy portfolio.