COIN-SPECIFIC (IDIOSYNCRATIC) RISK
Coin-specific risk refers to the isolated risk of a single coin or token in the cryptocurrency market, influenced by factors specific to the project itself. If for example, a project experiences a negative event (such as network failure or running away with investors’ funds), then the coin holder that invested in that project will be a victim to the project-specific risk. Coin-specific risk can be reduced through diversification.
The fact is that in the investment marketplace, risks is as much an incentive as it is a red flag. Conventional financial wisdom states that the higher the risk, the greater the expected returns. It’s no surprise that cryptocurrencies are the riskiest investments you can make.
Renald Walsh jr | Investment
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