Is Cryptocurrency Safe in 2025? Security Risks and Best Practices

Digital assets carry an inherent risk simply because the vast majority of them are speculative. For many investors, this risk is not something worrisome because a strategy can be adjusted to incorporate these assets without dramatically increasing the exposure. Much bigger problems are associated with security issues, confusing regulatory frameworks, and the prevalence of fraudulent projects.

Let’s discuss various security risks in crypto investments. We are going to cover some of the most prominent issues with products available in the cryptocurrency ecosystem. Contemporary investors must be prepared for all sorts of dangers when interacting with an industry that is still maturing. However, it is also one of the most promising destinations for capital allocation!

Cryptocurrency security in 2025

It is hugely important to keep in mind the maturity of the blockchain technology. Despite what many crypto enthusiasts believe in, blockchain is still a very young technology. While it has roots in cryptography and has been implemented way before the emergence of Bitcoin, the massive scale at which it is used today creates problems on its own.

Investors who want to explore the exciting world of DeFi and crypto have to be very careful when selecting digital assets with which they want to work.

Here are some risks that you will inevitably encounter in the world of crypto:

• Hacks and cyberattacks. From their very conception, centralized exchanges have been one of the juiciest targets for hackers. In 2023, Chainalysis published a report claiming that over $3.8 billion was stolen from various trading crypto platforms in 2022 alone. 82% of these losses happened due to poor security on decentralized platforms.
• Phishing and social engineering. This particular issue is the main reason why education remains crucial for maintaining crypto safety, as end users are still the biggest security vulnerability for many platforms. In 2021, over $10 billion was lost due to mishandling of personal information, successful phishing attacks, and fraud.
• Smart contract inefficiencies. All decentralized finance protocols use smart contracts to ensure that users can interact with their products in a trustless and permissionless manner. Smart contracts can be incredibly useful by removing the need for intermediaries. At the same time, poorly written contracts and bugs can be exploited or lead to critical errors. According to Immunefi, over $2.6 billion was lost to smart contract failures in 2022.
• Loss of private keys can be devastating. In some cases, there are no malicious scammers or hackers. Some users simply lose access to their private keys making it impossible to recover funds. Even if you follow good safety practices, use cold wallets and two-factor authentication, and make sure to interact only with time-tested platforms, you can still lose access to funds.

These are some of the most prominent risks when investing in cryptocurrencies. Other dangers include potential market manipulation, rug pulls, Ponzi schemes, and fraud. The world of crypto is a very cruel place for newcomers who jump headfirst into investment games without doing their homework.

How to protect your crypto assets

Many protocols and companies in the world of crypto are working on improving security by investing in external audits, offering bug bounties, and creating robust infrastructures. Novel approaches to building a safer DeFi ecosystem are also quite promising. For instance, some teams are experimenting with AI agents to provide additional layers of safety.

The impact of artificial intelligence on detecting fraudulent activities and issues with smart contracts can be tremendous. By using AI to analyze massive swaths of data and identify certain patterns, it is possible to prevent malicious activities.

A good example of an AI that allows users to feel safer when investing in DeFi is Maneki AI by Rivo. This virtual assistant is capable of many things including the following:

• It allows users to familiarize themselves with the UI.
• It can offer a wide range of strategies that were diligently analyzed by experts.
• The agent is capable of managing a portfolio autonomously based on user preferences.
• Maneki AI works around the clock to deliver excellent investment outcomes.
• Users can interact with it to receive educational materials, tips, and valuable insights.

One of the best features of this virtual assistant is fraud detection. If avoiding crypto scams is something that you consider important, make sure to check out Maneki AI. It can identify fake interfaces and suspicious activity. You won’t interact with fishy-looking protocols anymore!

The best practices for crypto safety

Investors who want to achieve success within the next decade have to focus on the world of DeFi and cryptocurrencies. Traditional markets are in a slump. The global economy does not look so hot right now. Real estate prices are prohibitively high. For the vast majority of investors, the only promising destination for capital allocation is the cryptocurrency ecosystem.

You have to deal with the risks associated with investing in crypto. Avoiding it altogether because it can be dangerous is not an option.

Here are some methods of mitigating risks mentioned previously:

• Use cold storage for long-term holding. If you have positions in some markets that you plan to maintain for a long time, it is a good idea to use cold storage or hardware wallets like Ledger Nano or Trezor. While it is great to know how advancements in blockchain technology are improving security measures across the DeFi ecosystem, smart self-custody is still the best way to keep your crypto safe.
• Do your own research. The DYOR is one of the best pieces of advice ever conceived by the crypto community. Investors have to do their due diligence and verify the legitimacy of the protocols they want to invest in. Alternatively, you can go to the Rivo Yield Marketplace and browse a rich selection of investment options picked by professionals who have done all the heavy lifting for you. Projects featured on the platform are diligently checked and verified by dedicated teams of specialists.
• Stay informed about the latest trends in crypto and DeFi security. The role of decentralized finance (DeFi in reshaping risk management is quite important. The ecosystem offers many ways to diversify investments, hedge against market risks, and even insure positions that you consider risky and important enough to protect. Learning about new security measures and novel instruments like DeFi insurance is crucial.
• Do not ignore expert advice on crypto protection. Enabling multi-factor authentication, using cold storage, and interacting only with protocols that have good track records — these are tips from experienced users and experts. Unfortunately, many newcomers to the crypto ecosystem do not listen to the word of wisdom. We strongly recommend listening to valuable tips and suggestions from experts.

The future of crypto security

In 2024, the number of security incidents in the DeFi ecosystem grew to 303 from 282 in 2023. The total volume of funds stolen also increased by 21%. However, the number of unique wallets interacting with the Ethereum ecosystem increased by a factor of 4, reaching over 22 million by December 2024. The combined TVL skyrocketed from $52 billion to $122 billion in the same period.

The significance and occurrence of security incidents decreased relative to the overall growth of the sector. Hopefully, this trend will continue.

If you are interested in safe DeFi investments, you should check out the Rivo Yield Marketplace. Here, you will find a plethora of showcased investment strategies that fit any portfolio and risk style!