Weaknesses in Crypto Trading that Beginner Traders Need to Know

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

Since the beginning 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?

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

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

Crypto assets which are commonly referred to as Crypto coins or Crypto money are attractive for fast trading (trading) because they can be done all day without holidays (24/7). In addition, prominent public figures such as Tesla owner Elon Musk also disclose Crypto Doge assets, which have high dollar values.

The value of Bitcoin and other Crypto coins can increase rapidly, without any constraints, because blockchain technology means these digital assets exist. Blockchain technology is an information recording system that makes changes, hacks or fraud happen, eliminating the need for an institution or authority to monitor and regulate.

However, individuals interested in Crypto assets should recognize the risks or drawbacks in investing in these coins. This is 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 danger of impairment in value is also not limited. Investors or traders who made profits yesterday may lose money as Crypto assets are bought and sold.

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

2. No Fundamentals To Analyze

Cryptocurrencies such as Bitcoin, Ripple, Ethereum, Tether and Doge are not currencies like 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 terms of basic fundamentals, such as shares of issuers whose companies have revenue, business, profits and dividends. Like mutual funds, the contents of their portfolio 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 Body

As already stated, Crypto assets exist because of the 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 trading.

It also implies that there is no investment protection or customer service responding to public concerns when Crypto assets occur. This is of course different from stocks or mutual funds supervised by the Financial Services Authority (OJK).

If the stock fluctuates abnormally or the business violates the terms, OJK can issue a warning. Likewise, OJK sanctions can 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 cryptocurrencies that can be traded in Indonesia, and currently there are 13 crypto-asset trading companies registered with Bappebti.

Now that we have recognized the drawbacks or risks of this Crypto asset, as a smart investor, we must consider investing in this digital asset. We may also choose less risky or scalable assets, such as mutual funds.

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

FAQs

Check out the information below because we will answer questions from the discussion of our article below.

What Are the Risks of Crypto Trading?

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

Where Does Crypto Profit Come From?

The advantage of Crypto is that transactions do not require assistance from third parties such as banks. In addition, there are no complicated requirements that you must meet 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 made, a cryptographic proof is created that has been verified and recorded on the blockchain.

Conclusion

Crypto Assets is a future-traded commodity 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 downsides of trading this Crypto, profits, and dividends. The valuation or fair value of Bitcoin and other coins is very difficult to predict and evaluate. This is of course different from stocks or mutual funds supervised by the Financial Services Authority (OJK).

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