Risk Assessment Techniques For Evaluating Bitcoin Cash (BCH)

Methods of risk assessment for Bitcoin cash (BCH)

Crypto currencies, including Bitcoin Cash (BCH), have attracted significant attention in recent years because of their high yield capabilities and lack of regulation. However, as with any investment, there is a risk, especially when assessing a crypto currency such as BCH. In this article, we will discuss the risk assessment methods to evaluate Bitcoin Cash (BCH) to help investors make reasonable decisions.

Risk Understanding

Before being immersed in specific risk assessment methods, it is necessary to understand the main risk associated with investment in the Crypto currency such as BCH. This risk includes:

* Volatility : Crypto currencies are known for high volatility, which means that prices can quickly and unpredictable fluctuate.

* Liquidity risk : Liquinity problems can cause significant loss if investors should quickly sell their property without finding a customer.

* Regulatory risk : changes in the regulatory environment can affect the value of cryptocurrencies and make them less attractive to investors.

* Safety risk : Cryptative investment is not risk, and security risk may include hacking, fraud and other types of Cyber ​​attacks.

risk assessment methods

We will use some risk assessment methods for assessing a potential risk of BCH. This includes:

• Analysis of the financial statement : Financial statements are required to assess the company’s financial health. Depending on the crypto currency such as BCH, it means that you have to examine information about revenues, costs and cash flows.

2.

• Technical analysis : Technical analysis includes studies of charts and models to provide future changes in price. This can help investors set up trends and a possible change in the market direction.

• Risk assessment regulating : Regulators are increasingly checking the CRIPTO currency space, and investors should be aware of all changes that can affect the value of BCH.

Risk profile

Based on our analysis, we set up a BCH risk profile:

* Market volatility : High (40%)

* Risk of liquidity : average (30%)

* Regulatory risk : low (20%)

* Security risk : average (20%)

Risk assessment based on scenario

In order to show the risk of investment in BCH, let’s consider some scenario based estimates:

1 scenario:
Bull market

Prices are expected to increase significantly due to increasing demand and limited bids. Risk profile will change in:

* Market volatility : low (30%)

* Risk of liquidity : high (40%)

* Regulatory risk : low (20%)

* Security risk : average (20%)

2 Scenario:
Bear Market

This scenario is expected to be significantly reduced due to increased offer and reduced demand. Risk profile will change in:

* Market volatility : High (50%)

* Liquinity risk : low (30%)

* Risk restoration : average (25%)

* Security risk : average (25%)

Conclusion

When investing in cryptocurrencies like BCH, investors must be aware of this risk before making a decision. Using risk assessment methods such as the financial statement analysis, industrial comparison, technical analysis, regulatory risk assessment and scenario risk assessment, investors can better understand the possible risk of BCH and make reasonable decisions.

Recommendations

If you are going to invest in BCH or any other crypto currency, note:

• A detailed investigation and along the exam must be made before making the decision.

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