THE CRYPTOCURRENCY MARKET IS THE RISKEST FINANCIAL MARKET

Abstract

The article examines the structure of the cryptocurrency market – participants: investors, traders, miners, developers, states and regulators, and financial instruments, to which types of cryptocurrencies are attributed. The cryptocurrency market, as the riskiest financial market, is closely related to its structure. The riskiness of its functioning depends on the nature of the relations that exist in the crypto market. Financial instruments operating on centralized crypto exchanges are less risky, because they can be freely exchanged for any national currency through the intermediary of the dollar. Decentralized exchange and over-the-counter trading is mediated by the exchange for cryptocurrency operating on a centralized exchange. The greatest risks of the cryptocurrency market are considered, associated with the basic principles of exchange operations and the main risks of over-the-counter trading in the context of the influence of the cryptocurrency market on the emission of money in countries. The main risks of the cryptocurrency market are: the use of cryptocurrencies for international payments in cases of settlements for illegal arms and drug trafficking, a veiled form of corruption, which is expressed through the transfer of real national or internationally recognized currencies to government officials for newly created digital assets that do not require large costs for their creation, the lack of state regulation, which affects the national issue of money. For investors, the risks are the loss of assets due to cyberattacks, refusal to recognize an asset as a means of payment. For developers, the risks are that a newly created digital currency will not always be recognized in the cryptocurrency market, and the costs of its creation are incurred. The state and regulators bear the risks that it is not always possible to integrate cryptocurrency into the national economy. Cryptocurrencies affect the issuance and circulation of cash. Particular attention is paid to state regulation of the circulation of international cryptocurrencies in Ukraine, restrictions on free trade and conversion into national currency. Separately, ways of regulating the influence of the cryptocurrency market on the emission of money in Ukraine, the existence of national crypto exchanges, and the creation of digital state money in Ukraine in the form of e-hryvnia are disclosed.