Before investing in cryptocurrency, it’s essential to understand the potential risks of crypto investment—especially if you want to minimize losses and make smarter financial decisions.
In Indonesia, the crypto market has grown rapidly in recent years.
By 2024, there were around 22.9 million registered crypto accounts across all platforms in Indonesia, with total transactions reaching approximately Rp650.6 trillion.
That’s a massive increase of 335.9% compared to the previous year.
Top-traded crypto assets in Indonesia include Tether (USDT), Bitcoin (BTC), Dogecoin (DOGE), Pepe (PEPE), and XRP (XRP).
Today, crypto is no longer just a digital commodity—it’s becoming a more complex financial instrument with the potential to support technological innovation and strengthen the future of the national economy.
However, the Financial Services Authority (OJK) has warned that crypto carries a relatively high level of risk, which makes it important for investors to proceed with caution.
Here are 5 major crypto investment risks you should be aware of before diving in:
1. Extreme Price Volatility
One of the most well-known crypto risks is its price volatility.
The value of cryptocurrencies can rise or fall dramatically in a very short period of time—sometimes within minutes or hours.
This kind of market movement can result in significant financial loss, especially for investors who are not prepared for the unexpected.
Volatility is often influenced by external factors such as global regulations, market adoption trends, and investor sentiment.
Tip: Be prepared for sudden shifts in value, and only invest what you’re willing to lose.
2. Cybercrime and Fraud
Crypto investments are vulnerable to cyber threats like hacking, phishing, and scam projects.
Some coins or platforms that promise unrealistically high returns may be part of a “pump and dump” scam—a tactic that tricks investors into buying at inflated prices before the price crashes.
To stay safe, always use trusted exchanges, avoid unknown tokens, and be wary of offers that sound too good to be true.
Security and awareness are key when choosing where and what to invest in.
3. Liquidity Risks
Not all cryptocurrencies have high liquidity.
This means it might be difficult to sell your assets quickly—especially during market downturns or when urgent cash is needed.
Low liquidity can trap your capital and delay your exit strategy, particularly if there aren’t enough buyers on the market.
If you’re planning to use crypto as a short-term investment or emergency fund, liquidity should be a top consideration.
4. Market Sentiment Risks
The crypto market is highly sensitive to investor sentiment, global news, political events, and changes in regulations.
Even a rumor or a government announcement can cause a sharp change in crypto prices.
This means that the market can be easily shaken—making it harder to predict price behavior or plan long-term strategies.
Investors should stay informed and be aware of how global developments might impact their holdings.
5. Religious and Ethical Concerns (Halal vs. Haram)
Another controversial risk—especially in Indonesia—is whether crypto is halal or haram according to Islamic principles.
Some Islamic scholars argue that crypto trading is halal as long as the transactions are transparent, honest, and provide economic benefit to individuals and society.
Others, however, classify crypto trading as haram due to its speculative nature, lack of intrinsic value, and resemblance to gambling.
In Indonesia, the Indonesian Ulema Council (MUI) issued a fatwa stating that using cryptocurrency as a currency is haram because of its gharar (uncertainty) and dharar (harm).
Crypto transactions also conflict with Law No. 7 of 2011, which recognizes the rupiah as the only official currency in Indonesia.
These concerns are important for Muslim investors who want to ensure their investments align with religious beliefs.
Conclusion: Weigh the Risks Before You Invest
Cryptocurrency offers exciting opportunities, but it also comes with significant risks.
Before making your move, be sure to:
- Do thorough research,
- Understand the risks involved,
- Use secure and legal platforms,
- And, if needed, consult with financial or religious experts.
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