Cryptocurrencies: A Guide to the Real Risks for Your Portfolio

Cryptocurrencies, fully digital currencies like Bitcoin, have become a central topic in the global financial landscape. Created in 2009 with the goal of establishing a decentralized payment system, free from the control of banks and governments, they are now attracting growing interest, including in Italy. According to recent data, the number of investors in the country is on the rise, with an average portfolio of around 1,634 euros. This phenomenon, which combines technological innovation and new investment opportunities, also brings significant risks, often underestimated by those new to this world. Thoroughly understanding what they are, how they work, and the dangers they conceal is the first step toward a mindful approach.

This article serves as a simple guide to navigating the complex universe of digital currencies. We will explore the technology that makes them possible, the blockchain, analyze the factors that determine their extreme volatility, and illustrate the concrete risks to your portfolio, with a special focus on the Italian and European context. The goal is to provide the reader, even those without specific financial expertise, with the tools to assess whether and how to allocate a portion of their savings to this sector, balancing the fascination with innovation with the prudence typical of our Mediterranean culture.

What Are Cryptocurrencies and How Were They Created

Cryptocurrencies are digital or virtual currencies secured by cryptography, a system that makes them extremely secure. Unlike traditional currencies like the euro or the dollar, they are not issued or controlled by a central authority, such as a bank or government. Instead, they operate on a decentralized system called a blockchain, a public and immutable ledger of all transactions. The first and most famous cryptocurrency is Bitcoin, created in 2008 by an anonymous entity known as Satoshi Nakamoto, with the idea of a peer-to-peer electronic payment system. Since then, thousands of other cryptocurrencies have emerged, including Ethereum, Solana, and Cardano, each with its own unique features.

The absence of an intermediary is the fundamental difference from the traditional banking system. When you make a bank transfer, it is the bank that guarantees and records the transaction. With cryptocurrencies, this function is performed by a network of computers spread across the globe, which validate and permanently record the operations. This mechanism not only allows for nearly instant, low-cost transfers anywhere in the world, 24 hours a day, but also opens the door to a new financial paradigm known as Decentralized Finance (DeFi).

Blockchain Technology Explained Simply

The blockchain, or “chain of blocks,” is the technology underlying how cryptocurrencies work, but its applications go far beyond that. We can imagine it as a large digital ledger, distributed and shared among thousands of computers worldwide. Each time a new transaction is made, it is recorded in a “block” of data. Once filled, the block is “sealed” with cryptography and permanently linked to the previous one, thus forming a chain. This process makes the recorded information immutable: once a block is added to the chain, it is nearly impossible to modify or delete it.

The fundamental characteristic of the blockchain is its decentralization. No single entity controls it; instead, it is managed collectively by the network’s participants. This makes it transparent and resistant to censorship or manipulation.

Each network participant holds a copy of the ledger, and a consensus mechanism ensures that all copies are synchronized and valid. This structure provides an unprecedented level of security and transparency. If a malicious actor wanted to alter a transaction, they would have to modify not only the block containing it but all subsequent blocks, and do so on the majority of the network’s computers—a virtually impossible feat. This robustness makes the blockchain ideal not only for digital currencies but also for the secure management of data in sectors like healthcare, logistics, and public administration.

Real Risks for Your Portfolio: Volatility and Uncertainty

The main risk associated with investing in cryptocurrencies is undoubtedly their extreme volatility. Their prices can experience large and sudden swings in a very short time, sometimes by tens of percentage points in a single day. For example, Bitcoin reached peaks of over $64,000 before crashing and fluctuating significantly. This instability is due to a combination of factors: market perception, news and regulatory announcements, and also pure speculation by large players. For a small saver, accustomed to more traditional instruments, this means that the invested capital can increase rapidly, but it can also suffer total or near-total losses.

In Italy, as in the rest of Europe, the investment culture is often geared towards prudence and capital preservation. The Mediterranean approach tends to favor tangible assets like real estate or low-risk financial instruments such as government bonds or postal savings deposits. Cryptocurrencies represent the exact opposite: an intangible asset, unregulated for years, and subject to global speculative dynamics. The Bank of Italy and Consob have repeatedly warned savers, emphasizing that trading in crypto-assets can lead to the complete loss of the invested funds. It is crucial that anyone deciding to allocate a portion of their portfolio to these assets is fully aware that they are exposing themselves to a very high risk.

Scams and Cybersecurity

The excitement over potential quick gains has created a fertile ground for increasingly sophisticated scams. Cybercriminals exploit the limited knowledge of new investors to steal funds. Among the most common frauds are fake trading platforms that promise guaranteed returns and then disappear with the deposited money, and Ponzi schemes, where the earnings of early investors are paid with the money of newcomers. Another widespread technique is phishing, where scammers send emails or messages that appear to come from legitimate platforms to steal login credentials for digital wallets.

According to a recent report, about 50% of Italian cryptocurrency users have had negative experiences, including fraud and phishing attacks.

Security is another critical point. Unlike a bank account, the custody of cryptocurrencies is the direct responsibility of the user. Private keys, alphanumeric codes that grant access to funds, must be guarded with the utmost care. If these keys are lost or stolen, the funds are gone forever, with no chance of recovery. Even the exchanges themselves, the platforms where cryptocurrencies are bought and sold, can be targets of hacker attacks, resulting in losses for users. It is therefore essential to use reputable platforms and adopt all possible security measures, such as two-factor authentication.

The Regulatory Context in Italy and Europe

For years, the cryptocurrency sector operated in a regulatory limbo. However, growing adoption has prompted institutions to intervene. At the European level, the breakthrough came with the MiCA (Markets in Crypto-Assets) regulation, which has been progressively coming into force between 2024 and 2025. This regulatory framework is the first comprehensive attempt to create common rules for all European Union countries, with the aim of protecting investors, ensuring financial stability, and promoting innovation safely. MiCA imposes transparency, authorization, and supervision requirements for crypto-asset issuers and service providers, such as exchanges.

In Italy, the implementation of MiCA was carried out through a legislative decree that designated the Bank of Italy and Consob as the competent authorities for supervision. These institutions are tasked with monitoring the market, authorizing operators, and sanctioning violations. For investors, this means greater protection. For example, issuers of stablecoins (cryptocurrencies pegged to a traditional currency) must now hold adequate reserves to guarantee their value. Furthermore, Italy has introduced a 26% tax on capital gains from the sale of cryptocurrencies. This new regulatory framework, while a fundamental step forward, is still evolving and requires investors to stay informed about current laws to operate in full compliance.

Innovation vs. Tradition: Is a Balance Possible?

The rise of cryptocurrencies challenges decades of traditional finance, which is based on intermediaries, centralized regulation, and defined market hours. Digital currencies, with their decentralized nature and a 24/7 active market, offer an alternative model that promises greater efficiency, accessibility, and transparency. However, this innovation clashes with a culture, especially the Mediterranean and Italian one, that is strongly tied to tradition and forms of savings considered safer and more tangible. The challenge for the modern investor is to find a balance, integrating novelty without abandoning prudence.

A balanced approach doesn’t mean rejecting innovation, but understanding and managing its risks. Instead of viewing cryptocurrencies as a total alternative to traditional investments, they can be seen as a diversification element for a modern portfolio. Allocating a small percentage of one’s capital, an amount one is willing to lose, can allow participation in the sector’s potential growth without compromising one’s financial stability. Financial education plays a crucial role: studying the technology, learning about the different types of cryptocurrencies, and understanding the basics of technical analysis can help in making more informed decisions, turning a pure gamble into a calculated investment.

Conclusions

Cryptocurrencies represent one of the most disruptive financial innovations of recent decades, attracting a growing number of investors, including in Italy. However, behind the promise of high returns lie concrete and significant risks that cannot be ignored. Extreme volatility, the constant threat of scams and cyberattacks, and a regulatory framework that is still settling require an extremely cautious and informed approach. As the Bank of Italy and Consob have repeatedly stated, investing in crypto-assets exposes one to the danger of losing the entire capital.

In a cultural context like Italy’s, where protecting savings is a fundamental value, investing in cryptocurrencies must be considered a high-risk activity, suitable only for a small, diversified portion of one’s portfolio. There is no magic formula for getting rich quickly and without danger. The key is financial education: understanding the technology, recognizing the warning signs of a scam, and staying updated on regulations. Only with a solid foundation of knowledge is it possible to balance the allure of innovation with necessary prudence, transforming speculation into a conscious and managed investment choice.

Frequently Asked Questions