Risk of regulatory change
To date, the crypto-currency market is essentially an international market operating in a non-harmonised European regulatory framework. In this respect, not all crypto-currency services offered by Belouga are subject to mandatory registration or approval.Customers are therefore aware that they do not enjoy the same protections as those who invest in "traditional" financial instruments regulated by European law, such as banks and financial services providers. The customer acknowledges that he/she understands and recognises that the crypto-currency market is a decentralised, partial or unregulated market.
Volatility is a measure of the volatility of asset prices in a particular market. If this price fluctuates over a wide range of values, or if the fluctuations are not uniform, the security is said to be volatile or unstable. Volatility represents the magnitude of an asset's performance over time.Volatility depends on a number of factors, including : B. Limited liquidity, nature of the market or market sentiment over time. For example, a buy or sell intervention may cause the price of the asset to rise or fall sharply.Volatility is measured using a statistical measure called standard deviation. Expressed as a percentage. If the price of the product fluctuates a lot, the standard deviation will be large. This increases the uncertainty of whether the product can be resold profitably, at a loss or not.The lower the volatility of an investment, the lower the risk of losing money. The higher the volatility, the higher the risk of volatility and the greater the associated losses or gains.The crypto-currency market is characterised by particularly high volatility.
While the advantages of blockchain in terms of transparency, data traceability, flexibility and the use of new technologies are undeniable, its weaknesses in terms of IT security cannot be ignored. New processes are developed daily to remedy these gaps and bugs and to improve security measures. However, there is still a long way to go before the blockchain ecosystem is fully protected against malicious criminal activity.There are many risks associated with the technology. These include vulnerabilities in the trading platform hardware and software, vulnerabilities due to lack of vigilance and training of end users, attacks on users (identity theft, malware, phishing, etc.) and the importance of strong passwords. by actively managing your own private key.Despite the IT and human resources deployed to best protect the network and storage elements of cryptographic assets in accordance with established cybersecurity practices, ignoring or overlooking the potential of such vulnerabilities cannot be underestimated.
Risk of hacking
The market value of all cryptographic assets in circulation has increased tenfold from the beginning of 2020 to the end of 2021. This increase in the use of crypto-currencies has become an attractive source of hacking, which can lead to the theft of funds from platforms and wallets, despite the extensive security measures in place.So far, such incidents have had no significant impact on the stability of the crypto financial system. However, as crypto-currencies gain in popularity, their potential impact on the wider economy and investors may increase.We therefore advise our clients to be careful about using advanced controls in their wallets (strong passwords, use of 2FA two-factor security, etc.).