Cryptocurrency investment is a process in which digital or virtual currencies are bought with the expectation of increasing their price in the future. Cryptocurrencies underpin decentralized networks using blockchain technology, leading variants such as Bitcoin and Ethereum. Unlike more traditional investments in stocks or bonds, the nature of cryptocurrencies is essentially very volatile; hence, prices can change within short periods. Cryptocurrency investors may benefit from either buying low-selling highs, long-term holdings, or even frequent trading. However, this is still a young market and much riskier due to uncertainty over regulations, technological vulnerabilities, and speculation in markets.

There are some risks associated with investments in cryptocurrencies: high volatility, regulatory uncertainty, cybersecurity, and market manipulation. These happen to be very volatile, and a wide fluctuation in their value within a short time may trigger an immense financial loss. Regulatory changes or crackdowns in different countries affect the market value of cryptocurrencies. Since it is also digital, there is a risk of hacking and fraud with cryptocurrencies, which may lead to a loss of investment. Prices could also change unpredictably due to market manipulations by large holders, or “whales.” Investors should be prepared for these risks and invest money they can afford to lose.