The risk involved in investing in any concurrency depends also by yourself !!!
Even though I am new in the cryptocurrency world, I have some background in quality field which got me knowledge of a couple of instruments that might help beginners like me to treat the risks involved in investing in any digital currency.
First fact that is best to have it in mind is the risk of losing big amount of the invested money due to the uncertainty of most of the cryptocurrencies. You will receive a lot of thoughts from different people who are encouraging you to invest into x or y currency because that is the “safest” one but in fact each of the currencies, no matter how powerful it is can drop down when you less expect it. Though, the real risk brought to you by any currency is actually given by three main factors. The interesting thing is actually that two of these factors can be to a certain extent influenced by yourself which means that the risk itself can be influenced by yourself. Basically to influence the risk you suld follow a PDCA Ascending Cicle. See picture below.
Do not jump from the begining with a big investment but grow you investement progresively after macking a plan, following that plan, checking the revenues and all the information and act again to invest in the right direction.
The first factor on which the total risk in depending is the cryptocurrency likelihood of dropping down in value, which is also the factor that cannot really be controlled by you or at least not to a significant extent.
The second factor is the impact of any drop down which can be totally under your control. The impact of the drop down means how much 99% drop down of the currency value is affecting you. In any other direction of investment whether is gambling or anything else, any adviser will tell you to invest only how much you afford to lose, or how Mr. Warren Buffet would say: “Do not put all eggs in one basket” or “Never test the depth of the river with both feet”.
The third factor is the predictability of the price fluctuation. This can be as well influenced by yourself through studying the coins that you are willing to invest in.
In all the instances, one important fact that you have to make peace with is that you’re never going to perfectly predict the road that a currency will take. What are the chances of any currency to succeed will never be known for sure, but you will be able to understand which the safest coins to invest in. It is very important to know that any coin can have drastic ups and downs and for this, below you will see some examples of drastic drop downs of some main coins.
Fig.1. Bitcoin Drop down 2017
Fig.2. Steem Drop down 2016
Fig.3. Ethereum Drop down 2017
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