There are two components to cryptocurrency safety — security and investment volatility.

Let’s first look at the security of your cryptocurrency investments. The cryptocurrency you hold in your account in a broker or exchange is typically very secure. That’s as long as you use a reputable exchange or broker (like all of those mentioned here). Indeed, one of the selling points of bitcoin’s blockchain is its security.

Most leading cryptocurrency exchanges keep the bulk of their digital assets in “cold storage.” This means they are stored offline and aren’t at risk of being hacked or stolen. In the earlier days of cryptocurrencies, there was a risk of exchanges being hacked, but these issues have largely been dealt with.

Alternatively, you can opt to keep your cryptocurrencies in a separate digital wallet of your own. You could even use one to create your own offline storage. However, the security and functionality of the major exchanges should be enough for most investors.

Now let’s consider safety from an investment perspective. It’s important to point out that cryptocurrencies — even bitcoin, the largest and most-established one — are a young asset class and are rather volatile. This is especially true for the smaller cryptocurrencies in the market. So, you need to be ready to withstand major price swings over time. And, just as with other investments, don’t invest money you can’t afford to lose.

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