1. Price Volatility: Bitcoin prices have been known to be extremely volatile, with wild swings in both directions over short periods of time. For example, in 2017, Bitcoin prices rose from around $1,000 to over $20,000 in a matter of months, only to crash back down to around $3,000 a year later.
2. Security Risks: Cryptocurrency exchanges are vulnerable to hacking, and the Bitcoin network itself is vulnerable to attacks from malicious actors. For example, in 2014, Mt. Gox, one of the largest Bitcoin exchanges at the time, was hacked and 850,000 Bitcoin were stolen.
3. Regulatory Risk: Governments around the world are still trying to figure out how to regulate Bitcoin and other cryptocurrencies. This uncertainty can create a risk for investors, as the regulatory environment could change suddenly and have a negative impact on the price of Bitcoin.
4. Scams: As with any new technology, there are plenty of scams and shady actors looking to take advantage of unsuspecting investors. For example, there have been numerous cases of people setting up fake Bitcoin exchanges and online wallets in order to steal people’s money.