Buying crypto takes a few minutes; holding it well takes more thought. Even the largest coins have lost more than half their value from past peaks, transfers sent to the wrong address usually cannot be recovered, and the IRS treats a coin-for-coin swap as a sale. This hub takes those risks in the order a beginner meets them, from what you are buying to taxes and scams. The tables refresh from live market data, and each rule below is checked against the agency or issuer that sets it.
What should beginners know before investing in crypto?
Crypto is a speculative, volatile asset: a coin is not a share of company profits, no federal program insures it, and key or address mistakes are usually permanent. The regulator says as much. When the SEC approved the first spot bitcoin exchange-traded products in January 2024, its chair called bitcoin "primarily a speculative, volatile asset" and stressed that the agency "did not approve or endorse bitcoin."
What you own is an entry on a public ledger, a blockchain, that only the holder of the matching private key can move; how blockchain works explains the mechanics. A stock is a stake in a company's earnings and a bond pays interest, while a coin's price rests on demand for its network and token. The bitcoin.org FAQ asks whether bitcoins can become worthless and answers yes, and the same holds for every other coin. Crypto vs stocks compares the two asset types.
The legal status of the largest coins became clearer in 2026. In March, the SEC issued an interpretation, which the CFTC joined, listing bitcoin, ether, solana, XRP, dogecoin and ada among digital commodities that are not securities in themselves. So those coins sit outside the disclosure rules that govern stocks, and outside SIPC protection, which covers securities. A broader market-structure bill, the CLARITY Act, passed the House in July 2025 but failed a Senate procedural vote, 49 to 50, on September 15, 2026, so Congress has not yet written a full rulebook for crypto trading platforms. US crypto regulation tracks where things stand.
A sensible order comes before any speculative purchase: an emergency fund in insured savings or Treasury bills, high-interest debt paid down, and regular contributions to diversified long-term investments, which the stocks hub covers. Where to keep an emergency fund handles the first step. Crypto then comes out of money you could leave untouched through a deep fall, and how much crypto to hold covers sizing. Before buying any coin, researching a cryptocurrency shows how to check its supply schedule, who controls it and where it trades.
How do bitcoin, ether and other major coins differ?
They differ in what each network is built to do, how new coins are issued and whether total supply has a hard cap. The six below are the assets in this hub's live data tables; listing them is not a recommendation.
| Asset | What the network does | How new coins are issued | Supply cap |
|---|---|---|---|
| Bitcoin (BTC) | Peer-to-peer payment network secured by miners (proof of work) | Mining rewards that halve on a fixed schedule | 21 million coins |
| Ether (ETH) | Smart-contract platform for apps and tokens; proof of stake since September 15, 2022 | Paid to validators, while part of every transaction fee is burned | None; supply can rise or fall |
| Solana (SOL) | Smart-contract platform; proof of stake | Paid to stakers on a declining inflation schedule | None |
| XRP | XRP Ledger, built in 2011 and 2012 for payments | None since launch; every transaction destroys a tiny amount | 100 billion created at launch; 80 billion went to Ripple, which locked 55 billion in escrow in 2017 |
| Dogecoin (DOGE) | Peer-to-peer digital currency; proof of work | 10,000 DOGE per block, about 5 billion a year | None |
| Cardano (ADA) | Proof-of-stake smart-contract platform run by stake pools | Staking rewards and treasury funding from a fixed reserve | 45 billion ada |
A cap limits how many coins can exist, not what they are worth. Uncapped coins add supply every year, which dilutes holders who do not receive the new coins, while a capped coin can still lose most of its value if demand fades. Bitcoin's built-in issuance cuts are covered in the halving explained, bitcoin vs ethereum compares the two networks, and bitcoin vs gold tests the digital-gold comparison. For each network's basics, start with what bitcoin is, what ethereum is, what Solana is, what XRP is or what dogecoin is.
Live prices for all six are on the crypto prices page, and the crypto converter turns any coin amount into dollars.
How volatile is crypto, and how do you read a drawdown?
Crypto is among the most volatile assets ordinary investors can buy, and the table below measures that two ways: worst fall from a peak and annualized volatility. Both come from daily closing prices.
| Asset | Last close | 1 year | 3 years (per year) | 5 years (per year) | 10 years (per year) | Worst drop from a high | Volatility (1 year) |
|---|---|---|---|---|---|---|---|
| Bitcoin | $78,688.00 | -28.8% | +31.1% | +4.5% | n/a | -83.2% (Dec 15, 2018) | 44.0% |
| Ethereum | $2,309.83 | -40.9% | +8.7% | -12.8% | n/a | -93.3% (Dec 14, 2018) | 60.8% |
| Solana | $95.60 | -49.1% | +33.4% | -15.4% | n/a | -96.3% (Dec 29, 2022) | 63.6% |
| XRP | $1.26 | -50.2% | +27.6% | +2.1% | n/a | -83.6% (Mar 12, 2020) | 64.1% |
| Dogecoin | $0.08 | -59.2% | +3.9% | -22.6% | n/a | -92.3% (Jun 18, 2022) | 66.0% |
| Cardano | $0.19 | -68.3% | -15.7% | -37.1% | n/a | -95.2% (Jun 28, 2026) | 75.3% |
Worst drop is the largest fall from a running high to a later low across all the price history the data covers, with the date the low was reached. Read it as the paper loss a buyer at the worst possible moment would have sat through before any recovery. The recovery math is unforgiving: a 50% fall needs a 100% gain to get back to even, a 75% fall needs 300%, and a 90% fall needs 900%, because each later gain works on a smaller base.
A worst drop is a record, not a floor. The next fall can be deeper, and coins with shorter histories have lived through fewer bad markets, so their figure can flatter them. Where the history is too short for a measure, the table shows n/a rather than a guess.
Volatility is the annualized standard deviation of daily price changes over the last 12 months, scaled by the square root of 365 because crypto trades every day. To picture it, divide by about 19: a reading of 60%, for example, implies a typical daily move of around 3%, up or down. It counts rises and falls alike and looks back only one year, so a quiet year can follow a crash. Use the two together: volatility describes the everyday ride, worst drop the worst stretch. The return columns are compound annual price changes, before fees and without staking rewards, and they describe the past only.
Worked example: What a 75% crypto drop does to a $20,000 portfolio
You hold $20,000 in total and put 5% of it, $1,000, into crypto. For this illustration the other $19,000, in stocks, bonds and cash, holds its value.
- Crypto falls 75%: $1,000 × (1 − 0.75) = $250, a $750 loss.
- Portfolio after the drop: $19,000 + $250 = $19,250, down 3.75%.
- To get back to $1,000, the crypto must rise 300%: $250 × 4 = $1,000.
Now make the slice 20%, or $4,000. The same 75% fall leaves $1,000, a $3,000 loss, and the portfolio drops to $17,000, down 15%. The coin did the same thing both times; the allocation decided whether it was a setback or a blow.
Allocations drift. If a rally doubles crypto's share of your portfolio, selling back to the target trims the risk, though in a regular account that sale is taxable; building a balanced portfolio shows where each piece fits. Crypto market cycles looks at past booms and busts, and how to read crypto charts explains exchange price views.
Buying a fixed dollar amount on a schedule, called dollar-cost averaging, spreads purchases across highs and lows. It does not prevent losses in a falling market, but it takes the timing decision away. Dollar-cost averaging in crypto covers the trade-offs, including fees on small buys, and lump sum vs dollar-cost averaging compares the two approaches with stocks.
What are the ways to invest in crypto?
You can get exposure in four main ways: coins on an exchange, coins in your own wallet, spot bitcoin or ether ETFs, or crypto inside a retirement account. The price exposure is similar; what changes is who holds the asset, what it costs, when you can trade and which protections apply.
| Route | Who holds the asset | Main costs | Trading hours | Taxes | Protections |
|---|---|---|---|---|---|
| Coins on a crypto exchange | The platform holds the keys; you have a claim on the platform | Trading fee or spread on each trade, plus withdrawal and network fees | Around the clock, every day | Each sale, swap or spend is a taxable disposal; the platform reports sales on Form 1099-DA | No FDIC or SIPC coverage for the coins; you rely on the platform's solvency |
| Coins in your own wallet | You hold the private keys | Network fees on each transfer, plus the price of a hardware wallet if you use one | Around the clock, every day | Same rules; you keep the records, since wallet activity may not appear on any 1099-DA | None: a lost recovery phrase or a mistaken transfer cannot be reversed |
| Spot bitcoin or ether ETF | The fund's custodian holds the coins; you own fund shares at a broker | Annual sponsor fee (0.25% at the iShares Bitcoin Trust, for example), plus any commission and the bid-ask spread | Weekdays only: core session 9:30 a.m. to 4 p.m. Eastern plus extended hours; 23-hour weekday trading is planned from December 6, 2026 | Capital gain or loss when you sell shares in a taxable account | SIPC covers the shares if a member broker fails, but not price drops |
| Crypto in a retirement account | A self-directed IRA custodian holds coins, or an ETF sits in a regular IRA or 401(k) | Setup, annual and transaction fees at self-directed IRA custodians, which can be high; fund fees for ETFs | Set by the custodian, or exchange hours for ETFs | No tax on trades inside the account; withdrawals follow IRA or 401(k) rules | Self-directed IRA custodians do not vet the assets; ETF shares at a member broker have SIPC custody coverage |
Businesses that exchange crypto for dollars are money transmitters under FinCEN's rules, so they must register as money services businesses and verify customer identity, which is why US platforms ask for ID. Registration is a compliance step, not a solvency check. Exchange fees explained breaks down spreads and fee tiers, and CEX vs DEX compares company-run exchanges with on-chain ones.
The SEC approved the first spot bitcoin exchange-traded products on January 10, 2024, and the exchange rule changes for spot ether products on May 23, 2024; generic listing standards approved in September 2025 now let exchanges list qualifying crypto trusts without a separate rule filing for each. These funds hold the coins but are not mutual funds: the iShares Bitcoin Trust, for example, is not registered under the Investment Company Act of 1940, and the bitcoin behind each share shrinks slowly as the trust sells coins to pay its fee. Bitcoin ETFs vs owning bitcoin, ether ETFs explained and what an ETF is go further.
Retirement accounts add a tax shelter, not safety. A self-directed IRA can hold coins directly, but an investor alert from the SEC, NASAA and FINRA warns that these custodians do not evaluate the legitimacy of what you buy, and it lists fraud, high fees, volatile performance and illiquidity among the risks. For 401(k) plans, the Labor Department withdrew its 2022 call for "extreme care" with crypto in May 2025, and a March 2026 proposal on how plan fiduciaries choose investments, including alternative assets, was still not final on November 1, 2026. For 2026, IRA contributions are capped at $7,500, plus a $1,100 catch-up at age 50 or older. Crypto in retirement accounts and IRA and 401(k) contribution limits have the details.
Worked example: Holding costs on $10,000 of bitcoin exposure for five years
The fee levels here are assumptions for the arithmetic, not quotes from any platform.
- Exchange charging a 1% fee or spread to buy: $10,000 × 0.01 = $100, paid once, plus a network fee if you withdraw to your own wallet.
- Spot ETF with a 0.25% annual sponsor fee: $10,000 × 0.0025 = $25 a year, or about $125 over five years if the value stays flat.
- Because the trust sells bitcoin to pay that fee, each share holds 0.9975 to the fifth power, about 98.8%, of its starting bitcoin after five years.
Up-front costs weigh more on short holds, annual fees on long ones. Neither route changes the price risk.
How do you buy crypto safely?
Use a registered platform, secure the account before funding it, send a small test before any large transfer, and never move money because a stranger asked you to. The steps below follow a first purchase from sign-up to record-keeping.
Check who runs the platform
Look the company up in FinCEN's registry of money services businesses and with your state's financial regulator, and read whose name is on the user agreement. A platform that will not say where it is based or who holds customer assets gives you reason to walk away.
Lock down the account before you fund it
Use a unique password and multi-factor authentication, such as an authenticator app or a hardware security key, and turn on a withdrawal address allowlist if the platform offers one. The SEC's custody bulletin for retail investors recommends multi-factor authentication and warns about phishing.
Price the whole trade
Before you confirm, add up the trading fee, the spread between the quoted price and the market price, and any withdrawal or network fee. On a $500 purchase, a 1.5% combined cost is $7.50, which adds up quickly on small, frequent buys.
Decide where the coins will live
Leaving coins on the platform is simplest but means trusting it with custody. Moving them to your own wallet means you hold the keys and all the responsibility. The next section compares the two.
Send a test amount on the right network
When you withdraw, pick the network the receiving wallet supports, because the same token, USDC for example, exists on several blockchains with different addresses. Exchange deposit addresses on the XRP Ledger often also need a destination tag, the number that tells the exchange which customer to credit. Send a small amount first, confirm it arrives, then send the rest.
Record the purchase for taxes
Note the date, amount, dollar price, fees and destination wallet for every buy. Brokers report part of this on Form 1099-DA, but only you see the whole picture once coins move between platforms and wallets.
Selling runs the same checks in reverse, and how to sell crypto and withdraw covers cashing out to a bank. Walk-throughs for buying bitcoin and buying ether apply these checks to each asset, gas fees explained covers network fees, and sent crypto to the wrong network explains what can be done after a mistake.
Should you keep crypto on an exchange or in your own wallet?
It depends on which failure you can better guard against: a platform freezing withdrawals or going bankrupt, or you losing the only keys to your own wallet. Either way, a wallet does not hold coins. It holds the private keys that control coins recorded on the blockchain, and whoever has the keys can move them.
Custodial accounts: you trust the platform
With a custodial account, the platform holds the keys and you hold a claim on the platform. The SEC's custody bulletin states the risk plainly: if a custodian is hacked, shuts down or goes bankrupt, you may lose access to your crypto. Celsius, which paid interest on deposited coins, effectively halted its platform on June 12, 2022. At FTX, the SEC alleged that customer funds were diverted to an affiliated trading firm, and the founder was sentenced to 25 years in prison in March 2024 for what prosecutors called stealing more than $8 billion of customers' money. The SEC suggests asking any custodian whether it lends out or commingles customer assets, what insurance it carries and what it charges.
Neither federal backstop applies to those coins. FDIC insurance does not cover crypto assets or protect against the failure of a crypto exchange, custodian or wallet provider. When a member brokerage fails, SIPC protects customers' securities and cash up to $500,000 per customer, including up to $250,000 in cash, but not crypto assets that are not securities, and never against falling prices. FDIC vs SIPC sets out what each covers, and SIPC coverage explained walks through a claim.
Self-custody: you hold the keys
Self-custody removes the platform and puts every safeguard on you. Wallets commonly follow the BIP-39 standard, which turns the wallet's secret into a recovery phrase of 12 to 24 words; those words can rebuild the wallet on any compatible device, so anyone who sees them can empty it. FINRA suggests keeping the phrase offline in a secure place such as a safe or a bank safe deposit box.
A hardware wallet keeps the keys on a small offline device that signs each transaction, away from malware on an internet-connected computer. Wallet apps on a phone or computer are hot wallets: always online, convenient for small balances and more exposed to hacks. Hot vs cold wallets compares the two, and how to store crypto safely covers backups and setup.
Before moving coins to your own wallet
- Write the recovery phrase on paper or metal, never in a photo, email or cloud note.
- Restore the wallet from the phrase on a second device to prove the backup works.
- Send a small test amount and confirm it on a block explorer before moving the rest.
- Decide how an executor would find the phrase after your death without anyone being able to use it now.
- Keep a record of every transfer for cost-basis tracking.
Some wallets avoid a single phrase by splitting control of the key across devices or parties, a design called multi-party computation; seed phrase vs MPC wallets compares the two. Custodial vs non-custodial wallets goes deeper on the main trade-off, and crypto inheritance planning covers passing access to heirs.
How is crypto taxed in the US?
The IRS treats crypto as property, so selling, swapping or spending it triggers capital gains or losses, while staking, mining and pay received in crypto count as income. Buying with dollars and holding is not a taxable event, and neither is moving coins between wallets you own, unless you pay the network fee in crypto, which the IRS counts as a transaction. Every federal return asks whether, during the year, you received a digital asset as a reward, award or payment, or sold, exchanged or otherwise disposed of one.
Coins held one year or less produce short-term gains, taxed at ordinary income rates; coins held more than one year get long-term rates, which for 2026 are 0% up to $49,450 of taxable income (single) or $98,900 (married filing jointly); 15% above that; 20% above $545,500 (single) or $613,700 (joint). Losses offset gains first, and a net loss left over can be deducted at up to $3,000 a year against ordinary income ($1,500 if married filing separately), with the rest carried forward to later years.
Your cost basis is what you paid, including fees and commissions. Since January 1, 2025, basis has to be tracked separately for each wallet or account rather than pooled across everything you own, and Revenue Procedure 2024-28 explains how to allocate older basis to each one. Crypto cost basis methods covers first-in, first-out and specific identification. Sales and swaps go on Form 8949 and Schedule D, and starting with 2025 returns, Form 8949 has separate boxes, G through L, for digital assets. Staking, mining and similar income goes on Schedule 1 of Form 1040.
Brokers report crypto sales to the IRS on Form 1099-DA, phased in this way: Gross proceeds for sales from January 1, 2025; cost basis for covered assets bought from January 1, 2026 in a custodial account. Coins bought before 2026, or moved onto a platform from your own wallet, are generally noncovered, so the form can show sale proceeds with no basis, and if you do not supply the basis yourself, your return can overstate the gain. Form 1099-DA explained walks through each box.
Staking rewards are taxable income at their fair market value when you gain control of them, under Revenue Ruling 2023-14, whether you stake directly or through an exchange, and that value becomes your basis in the reward coins. Is staking income taxable? covers the timing questions, and gifts and charitable donations of crypto have their own rules, covered in crypto gifts and donations.
Selling a coin at a loss and buying it back soon after is where crypto and stock rules differ today. IRS Publication 550 applies the wash-sale rule to losses on stock or securities, and the IRS guidance reviewed for this page does not extend it to coins held directly. Congress could change that: H.R. 9172 and H.R. 10357 would apply the wash-sale rule to digital assets; neither had passed the House as of November 1, 2026. Whether the rule reaches spot crypto ETF shares is a question for a tax professional. Crypto tax-loss harvesting and the wash-sale rule cover the mechanics.
Worked example: Tax on a $1,405 crypto gain, short-term vs long-term
You buy $4,000 of a coin and pay a $40 fee, so your cost basis is $4,040. Later you sell all of it for $5,500 and pay a $55 fee, so you realize $5,445.
- Gain: $5,445 − $4,040 = $1,405.
- Held one year or less and taxed at a 22% ordinary rate: $1,405 × 0.22 = $309.10.
- Held more than one year and taxed at the 15% long-term rate: $1,405 × 0.15 = $210.75.
Holding past the one-year mark lowers the federal tax by $98.35 in this case. If your taxable income, including the gain, stayed inside the 0% long-term band, the federal tax on the long-term gain would be $0. State income tax may apply on top.
Digital asset tax rules have changed several times in recent years, and bills in Congress could change them again, so check the current IRS instructions for the year you file and consider a tax professional for your situation. For a plain-language primer on gains, see crypto capital gains tax 101, and the crypto profit calculator works out the profit on a trade after fees, before tax.
What are stablecoins and how are they regulated?
Stablecoins are tokens built to hold a steady price, usually $1, and the largest ones do it mainly by holding cash and short-term Treasury bills as reserves. The table lists the five largest dollar stablecoins by supply.
| Stablecoin | Circulating supply | 30-day change | Price | Backing |
|---|---|---|---|---|
| Tether (USDT) | $179.23B | -2.5% | $0.9990 | fiat backed |
| USD Coin (USDC) | $71.42B | -3.7% | $0.9996 | fiat backed |
| Sky Dollar (USDS) | $6.4B | -4.6% | $0.9999 | crypto backed |
| Dai (DAI) | $4.74B | -1.2% | $1.0000 | crypto backed |
| Ethena USDe (USDe) | $4.54B | -7.1% | $0.9984 | crypto backed |
A price away from $1.00 means a coin is off its peg, and the backing column shows how each one tries to hold its value. Pegs can slip: in March 2023, about $3.3 billion of USDC's reserves, roughly 8%, was stuck at the failed Silicon Valley Bank, and USDC traded below $1 until regulators said the bank's depositors would be made whole. USDC vs USDT compares how the two largest are backed, and the stablecoin depeg history study tracks past breaks.
The GENIUS Act is the first federal law written for payment stablecoins. Its timeline: Signed July 18, 2025 (Public Law 119-27); takes effect January 18, 2027. Only permitted issuers may issue them in the US, under a strict reserve rule: at least 1:1 reserves in cash or Federal Reserve balances, deposits at insured banks and credit unions, Treasuries with 93 days or less to maturity, overnight repos and reverse repos backed by Treasuries, government money market funds that hold only those assets, other liquid federal government assets a regulator approves, and tokenized versions of the non-repo assets. Issuers must publish their reserves monthly, examined by a registered public accounting firm, and may not pay holders interest just for holding the coin. The coins are not federally insured, and claiming otherwise is illegal; if an issuer fails, holders' claims on the reserves come first. From July 18, 2028, platforms serving US customers may no longer offer stablecoins from issuers that are not permitted, with exceptions for some foreign issuers. Regulators are still finishing the implementing rules, and the OCC published its final rule in October 2026.
Stablecoin regulation and the GENIUS Act covers the details, how stablecoins work explains minting and redemption, and stablecoin yield vs bank interest compares holding tokens with a savings account. The top stablecoins page tracks supply and prices across issuers, and sending money with stablecoins covers payments abroad.
Which crypto scams cause the biggest losses?
Fake investment platforms, often run as pig-butchering romance or friendship scams, caused the largest crypto losses reported to the FBI in 2025. For crypto-related fraud, the FBI's Internet Crime Complaint Center counted $11.37 billion lost across 181,565 complaints in 2025, a 22% rise in losses from 2024. Investment fraud accounted for $7.23 billion of that.
Pig butchering
As FinCEN explains, the name comes from fattening a hog before slaughter. A stranger makes contact by text, social media or a dating app, builds trust over time, often as a friend or romantic partner, then introduces a crypto trading platform. The platform is fake. It shows growing balances to encourage larger deposits, then demands "taxes" or "fees" before any withdrawal. FinCEN's 2023 alert ties many of these schemes to criminal groups in Southeast Asia that use trafficked workers, and its red flags include unsolicited contact promising big returns, instructions to use a crypto ATM, and pressure to cash out CDs or borrow against a home to invest more. The FTC's rules of thumb apply: only scammers guarantee profits, and online dating should never come with investment advice.
Address poisoning
Scammers send a tiny or fake token transfer from an address whose first and last characters match one you use. Many wallets shorten addresses on screen, so the lookalike sits in your history, waiting to be copied by mistake. The FBI's advice is to check the entire address before sending and confirm it on a block explorer.
Fake support and impersonation
Impersonators pose as exchange or wallet support, a bank's fraud team or a government agency, claim your account is compromised and urge you to move coins to a "safe" wallet they control. Tech and customer support scams with a crypto link cost victims $1.23 billion in 2025, by the FBI's count. The FTC is blunt: only scammers demand payment in crypto, including to "protect" your money. The IRS has also warned about letters with QR codes that send people to a fake "Digital Assets Compliance Portal"; the IRS does not require anyone to register digital assets.
Crypto ATMs and recovery scams
Scammers often tell victims to feed cash into crypto ATMs, which convert it to coins sent straight to the scammer. The FBI logged 13,460 complaints involving crypto ATMs and kiosks in 2025, with $389 million lost. A second scam can follow the first: recovery services that promise to trace and return stolen crypto for an up-front fee, which the FBI warns to be wary of.
Wrong-network mistakes
Not every loss is theft. Sending a token on a network the receiving wallet or exchange does not support, or leaving off a required destination tag, can strand the funds. Whether anyone can retrieve them depends on who controls the receiving address, because the blockchain transfer itself cannot be reversed.
If you are targeted, stop sending money, contact the platform you sent from, and report it to the FBI's IC3 with the addresses, transaction IDs, amounts and dates. The National Elder Fraud Hotline, 833-372-8311, helps older victims. Crypto scams covers more schemes and their warning signs.
What are the biggest risks of investing in crypto?
The biggest risks are deep price drops, permanent losses from custody mistakes or hacks, platform failures, scams and rules that are still being written. Here is how each one shows up, and where this hub covers the defense.
- Price risk. Falls of more than half have happened repeatedly, and no coin's past sets a floor. The $20,000 example above shows how allocation size, not coin choice, decides how much a crash hurts.
- Concentration and liquidity risk. Smaller tokens can have thin trading and concentrated ownership, which makes prices easier to push around and positions harder to exit. Any coin can go to zero, and bitcoin.org's own FAQ says so about bitcoin.
- Custody and operational risk. Lost recovery phrases, wrong addresses and wrong networks are usually permanent. The CFTC notes that blockchain transfers cannot be reversed, disputed or charged back.
- Counterparty risk. Exchanges, lenders and yield platforms can freeze or fail, as Celsius and FTX did in 2022. Crypto lending risks and what staking is cover the yield side, where rewards can come with lockup periods and platform exposure.
- Regulatory risk. The CLARITY Act stalled in the Senate, stablecoin rules are still being finalized and crypto tax bills are pending, so rules for platforms, taxes and products can change.
- Market-hours risk. Coins trade around the clock, so big moves can happen overnight or on weekends, when ETF markets are closed and many investors are not watching.
- Technology risk. DeFi apps, bridges and layer 2 networks add smart-contract code that can contain bugs or be exploited. What DeFi is, crypto bridges explained and layer 2 networks explained describe the extra layers.
- Tax and record-keeping risk. Every swap is a taxable event, and missing basis records can mean overpaying or answering IRS notices.
These sit on top of the risks every investment carries, from inflation to liquidity, which types of investment risk lays out. Every guide in this hub is listed below by topic.