High Volatility: Altcoins and tokens often experience extreme price fluctuations, leading to potential losses within a short period.
Lower Liquidity: Some altcoins and tokens may have low trading volume, making it difficult to buy or sell large amounts without impacting the price.
Regulatory Uncertainty: Altcoins and tokens may face sudden regulatory changes or restrictions, which can affect their legality and market value.
Lack of Transparency: Many projects lack transparency regarding their development, funding, or team, making it harder to assess their credibility.
Project Failure: New projects have a higher risk of failure due to poor management, competition, or lack of adoption, leading to a complete loss of investment.
Scams and Fraud: The altcoin and token market is rife with scams, including rug pulls, where project creators disappear with investors' funds.
Security Vulnerabilities: Altcoins and tokens may have weak security protocols or flaws in their smart contracts, leading to hacks or loss of funds.
Market Manipulation: Due to their smaller market cap, altcoins and tokens are more susceptible to price manipulation by whales or coordinated groups.
Limited Use Cases: Many altcoins and tokens lack real-world utility or adoption, which can make them highly speculative and unsustainable in the long run.
Dependency on the Main Project: Tokens often rely on the success of the platform they’re built on. If the main platform faces issues, the tokens could become worthless.
