Weaknesses of Crypto Trading that Beginner Traders Need to Know

Lovata Andrean

Weaknesses of Crypto Trading that Beginner Traders Need to Know
Weaknesses of Crypto Trading that Beginner Traders Need to Know

Rancakmedia.com – If you are a beginner, it would be better for you to know what the weaknesses of crypto trading are first in this article, let's look at the complete information here. In Indonesia, cryptocurrency or popular Crypto assets as investments.

Since the start of this year a number of Crypto assets including Bitcoin, Ethereum, Ripple, Tether, and Doge have increased in value to their owners. What about risk issues?

Aset Cryptocurrency are commodities traded on futures exchanges in Indonesia, according to the Commodity Futures Trading Supervisory Agency (Bappebti) of the Ministry of Trade (Kemendag).

Although Bank Indonesia prohibits the use of Crypto-active assets as currency or means of payment, they can be used as investment and traded instruments.

Crypto assets which are usually called Crypto coins or Crypto money are attractive for fast trading (trading) because they can be done all day long without holidays (24/7). In addition, prominent public figures such as Tesla owner Elon Musk also disclosed Crypto Doge assets, which have a high dollar value.

The value of Bitcoin and other Crypto coins can increase quickly, without constraints, because blockchain technology means these digital assets exist. Blockchain technology is an information recording system that makes changes, hacking, or fraud possible, eliminating the need for institutions or authorities to monitor and regulate.

However, individuals interested in Crypto assets should recognize the risks or drawbacks in investing in these coins. Here's the review here.

Disadvantages of Crypto Trading

Disadvantages of Crypto Trading

1. Very High Risk

The value of Bitcoin and other coins can increase endlessly by hundreds of percent. However, the dangers of impairment are also not limited. Investors or traders who made a profit yesterday may lose money as Crypto assets are bought and sold.

This is different from investing in the capital market such as shares or mutual funds. On the Indonesian Stock Exchange, the maximum share loss limit in one day is 7% and the auto refusal mechanism will start immediately. If this decline lasts for days, the Exchange can also impose a temporary trading halt (suspension) so that losses to stock or mutual fund investors can be minimized.

2. There are no basics to analyze

Cryptocurrencies such as Bitcoin, Ripple, Ethereum, Tether and Doge are not currencies like the rupiah or US$. Because, even though it is called a coin, Crypto is not a currency with basic foundations, such as a country's economic situation, interest rates and other macroeconomic data.

Crypto assets also cannot be evaluated in relation to basic fundamentals, such as shares of issuers whose companies own revenues, businesses, profits and dividends. Like mutual funds, the contents of their portfolios are disclosed on the fund's fact sheet. Therefore, the valuation or fair value of Bitcoin and other coins is very difficult to predict and evaluate.

3. No Authority

As already stated, Crypto assets exist because of blockchain technology which allows the automation of all transaction data. Since everything is controlled by the blockchain system, there is no longer any human authority to set rules or restrict trade.

This also implies that there is no investment protection or customer service that responds to public concerns when Crypto assets occur. This is certainly different from shares or mutual funds which are supervised by the Services Authority Finance (OJK).

If shares fluctuate abnormally or a business violates requirements, the OJK can issue a warning. Likewise, OJK sanctions may apply to mutual funds and investment managers who do not comply with the rules.

Currently, the Ministry of Trade CoFTRA only monitors Crypto traders and Crypto assets traded in Indonesia. Bappebti has traded up to 229 types of cryptocurrency that can be traded in Indonesia, and currently there are 13 crypto-asset trading companies registered with Bappebti.

Now that we recognize the downsides or risks of these Crypto assets, as smart investors, we should consider investing in these digital assets. We can also choose less risky or scalable assets, such as mutual funds.

Mutual funds are investor funds managed by investment managers to invest in financial assets, such as shares, bonds and money markets. Official investments supervised by the OJK are mutual funds.

FAQ

Pay attention to the information below because we will answer questions from our article discussion below.

What are the Risks of Crypto Trading?

The risks of cryptocurrencies are relatively high because the medium of exchange uses cryptography exclusively. This means that there is no guarantee of assets from the investment made. 2. Digital money price fluctuations are also very high. This makes it one of the most speculative trades.

Where Do Crypto Profits Come From?

The advantage of Crypto is that transactions do not require assistance from third parties such as banks. Apart from that, there are no complicated requirements that you have to fulfill to transact and own Crypto.

How Does Crypto Work?

This is because this digital currency works in such a way that when a cryptocurrency transaction is carried out, a cryptographic proof is created that has been verified and recorded on the blockchain.

Conclusion

Crypto Assets are commodities traded on futures exchanges in Indonesia, according to the Commodity Futures Trading Supervisory Agency (Bappebti) of the Ministry of Trade (Kemendag). Bitcoin, Ripple, Tether and Doge are popular investments in Indonesia.

However, individuals interested in Crypto assets should recognize the risks or Disadvantages of Trading these Crypto, profits, and dividends. The valuation or fair value of Bitcoin and other coins is very difficult to predict and evaluate. This is certainly different from shares or mutual funds which are supervised by the Financial Services Authority (OJK).

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Lovata Andrean

Hi, I'm Lovata, I'm not Ai but I am a content writer for SEO, Technology, Finance, Travel, Cooking Recipes and others. I hope this can be useful for all my friends. Thanks