Understanding the risks associated with wallets, depository services, trading, lending, and borrowing in the crypto space

Alexey Mikhaylov

Article ID: 2223
Vol 7, Issue 3, 2023

VIEWS - 230 (Abstract) 151 (PDF)


The crypto space offers numerous opportunities for users to grow their wealth through trading, lending, and borrowing activities. However, these opportunities come with inherent risks that need to be carefully managed to protect your assets and maximize returns. By understanding the risks associated with wallets and depository services, trading, lending, and borrowing, users can make informed decisions and enjoy the benefits of the rapidly evolving world of cryptocurrencies. This review paper analyses 43 papers for the period of 2019–2023 and proposes recommendations for policy makers. The results confirm that international regulators expect national authorities to implement a regulatory framework for digital assets comparable to those that already exist for traditional finance. For national authorities, this means having and using the powers, tools and resources to regulate and oversee a growing market. Authorities should cooperate and coordinate with each other, at the national and international levels, to encourage consistency and knowledge sharing. Market operators (exchanges), service providers, exchanges and wallets, create effective risk management structures, as well as reliable mechanisms for collecting, storing, protecting and reporting data.


wallets; depository services; trading; lending; borrowing

Full Text:



Aharon DY, Demir E (2021). NFTs and asset class spillovers: Lessons from the period around the COVID-19 pandemic. Finance Research Letters 47: 102515. doi: 10.1016/j.frl.2021.102515

Ahmed WMA (2020). Is there a risk-return trade-off in cryptocurrency markets? The case of bitcoin. Journal of Economics and Business 108: 105886. doi: 10.1016/j.jeconbus.2019.105886

Akcora CG, Dixon MF, Gel YR, Murat K (2018). Bitcoin risk modeling with blockchain graphs. Economics Letters 173: 138–142. doi: 10.1016/j.econlet.2018.07. 039

Akyildirim E, Corbet S, Sensoy A, Yarovaya L (2020). The impact of blockchain related name changes on corporate performance. Journal of Corporate Finance 65: 101759. doi: 10.1016/j.jcorpfin.2020.101759

Alexander C, Imeraj A (2021). The Bitcoin VIX and its variance risk premium. The Journal of Alternative Investments 23(4): 84–109. doi: 10.3905/JAI.2020.1.112

Almeida J, Gonçalves TC (2022). A systematic literature review of volatility and risk management on cryptocurrency investment: A methodological point of view. Risks 10(5): 107. doi: 10.3390/risks10050107

Almeida J, Gonçalves T (2023). Portfolio diversification, hedge and safe-haven properties in cryptocurrency investments and financial economics: A systematic literature review. Journal of Risk and Financial Management 16(1): 3. doi: 10.3390/jrfm16010003

Angerer M, Hoffmann CH, Neitzert F, Sascha K (2020). Objective and subjective risks of investing into cryptocurrencies. Finance Research Letters 40: 101737. doi: 10.1016/j.frl.2020.101737

Ante L (2022). The non-fungible token (NFT) market and its relationship with bitcoin and Ethereum. FinTech 1(3): 216–224. doi: 10.3390/fintech1030017

Aslam F, Aziz S, Nguyen DK, et al. (2020). On the efficiency of foreign exchange markets in times of the COVID-19 pandemic. Technological Forecasting and Social Change 161: 120261. doi: 10.1016/j.techfore.2020.120261

Bhuiyan MA, An J, Mikhaylov A, et al. (2021). Renewable energy deployment and COVID‐19 measures for sustainable development. Sustainability 13(8): 4418. doi: 10.3390/su13084418

Borri N (2019). Conditional tail-risk in cryptocurrency markets. Journal of Empirical Finance 50: 1–19. doi: 10.1016/j.jempfin.2018.11

Borri N, Liu Y, Tsyvinski A (2022). The economics of non-fungible tokens. Available online: https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=4052045 (accessed on 18 August 2023).

Bouri E, Cepni O, Gabauer D, Gupta R (2021). Return connectedness across asset classes around the COVID-19 outbreak. International Review of Financial Analysis 73: 101646. doi: 10.1016/j.irfa.2020.101646

Bouri E, Saeed T, Vo XV, Roubaud D (2021). Quantile connectedness in the cryptocurrency market. Journal of International Financial Markets, Institutions and Money 71: 101302. doi: 10.1016/j.intfin.2021.101302

Candila V, Maximov D, Mikhaylov A, et al. (2021). On the relationship between oil and exchange rates of oil-exporting and oil-importing countries: From the great recession period to the COVID-19 era. Energies 14: 8046. doi: 10.3390/en14238046

Chen J, Tang G, Yao J, Zhou G (2022). Investor attention and stock returns. Journal of Financial and Quantitative Analysis 57(2): 455–484. doi: 10.1017/S0022109021000090

Chirtoaca D, Ellul J, Azzopardi G (2020). A framework for creating deployable smart contracts for non-fungible tokens on the Ethereum blockchain. In: Proceedings of 2020 IEEE International Conference on Decentralized Applications and Infrastructures (DAPPS); 3–6 August 2020; Oxford, UK. pp. 100–105.

Corbet S, Larkin C, Lucey B (2020). The contagion effects of the COVID-19 pandemic: Evidence from gold and cryptocurrencies. Finance Research Letters 35: 101554. doi: 10.1016/j.frl.2020.101554

Dinçer H, Yüksel S, Mikhaylov A, et al. (2022). Analysis of environmental priorities for green project investments using an integrated q-rung orthopair fuzzy modelling. IEEE Access 10. doi: 10.1109/ACCESS.2022.3174058

Dowling M (2021a). Fertile LAND: Pricing non-fungible token. Finance Research Letters 44: 102096. doi: 10.1016/j.frl.2021.102096

Dowling M (2021b). Is non-fungible token pricing driven by cryptocurrencies? Finance Research Letters 44: 102097. doi: 10.1016/j.frl.2021.102097

Enoksen FA, Landsnes CJ, Lučivjanská K, Molnár P (2020). Understanding risk of bubbles in cryptocurrencies. Journal of Economic Behavior & Organization 176(20): 129–144. doi: 10.1016/j.jebo.2020.05.005

Gao X, Gu Z, Niu S, Ryu S (2022). Effects of international tourist flow on startup financing: Investment scope and market potential perspectives. SAGE Open 12(4). doi: 10.1177/21582440221126455

Gao X, Li D, Huang W (2023). Intergenerational education mobility: A machine learning perspective. World Journal of Vocational Education and Training 5(1): 1–10. doi: 10.18488/119.v5i1.3268

Goodell JW, Goutte S (2021). Diversifying equity with cryptocurrencies during COVID-19. International Review of Financial Analysis 76: 101781. doi: 10.1016/j.irfa.2021.101781

Grobys K, Huynh TLD (2021). When tether says “Jump!” Bitcoin asks “How low?”. Finance Research Letters 47: 102644. doi: 10.1016/j.frl.2021.102644

Hamill PA, Li Y, Pantelous AA, et al. (2021). Was a deterioration in ‘connectedness’ a leading indicator of the European sovereign debt crisis? Journal of International Financial Markets, Institutions and Money 74: 101300. doi: 10.1016/j.intfin.2021.101300

Hasan M, Naeem MA, Arif M, Yarovaya L (2021). Higher moment connectedness in cryptocurrency market. Journal of Behavioral and Experimental Finance 32: 100562. doi: 10.1016/j.jbef.2021.100562

Häusler K, Xia H (2021). Indices on cryptocurrencies: An evaluation. Digit Finance 4: 149–167. doi: 10.1007/s42521-022-00048-8

Hoang LT, Baur DG (2021). How stable are stablecoins? The European Journal of Finance. doi: 10.1080/1351847X.2021.1949369

Horky F, Rachel C, Fidrmuc J (2022). Price determinants of non-fungible tokens in the digital art market. Finance Research Letters 48: 103007. doi: 10.1016/j.frl.2022.103007

Hossain MS (2021). What do we know about cryptocurrency? Past, present, future. China Finance Review International 1(4): 552–572. doi: 10.1108/CFRI-03-2020-0026

Huang W, Gao X (2023). Forecasting bitcoin futures: A lasso-BMA two-step predictor selection for investment and hedging strategies. SAGE Open 13(1). doi: 10.1177/21582440231151652

Huang Y, Luk P (2020). Measuring economic policy uncertainty in China. China Economic Review 59: 101367. doi: 10.1016/j.chieco.2019.101367

Ji Q, Zhang D, Zhao Y (2020). Searching for safe-haven assets during the COVID-19 pandemic. International Review of Financial Analysis 71: 101526. doi: 10.1016/j.irfa.2020.101526

Kanellopoulos IF, Gutt D, Li T (2021). Do non-fungible tokens (NFTs) affect prices of physical products? Evidence from trading card collectibles. Available online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3918256 (accessed on 18 August 2023).

Karim S, Lucey BM, Naeem MA, Uddin GS (2022). Examining the interrelatedness of NFTs, DeFi tokens and cryptocurrencies. Finance Research Letters 47: 102696. doi: 10.1016/j.frl.2022.102696

Ko H, Son B, Lee Y, et al. (2022). The economic value of NFT: Evidence from a portfolio analysis using mean-variance framework. Finance Research Letters 47: 102784. doi: 10.1016/j.frl.2022.102784

Li J, Dinçer H, Yüksel S, et al. (2022). Bipolar q-ROF hybrid decision making model with golden cut for analyzing the levelized cost of renewable energy alternatives. IEEE Access 10: 42507–42517. doi: 10.1109/ACCESS.2022.3168315

Mathivanan P, Balaji Ganesh A (2023). ECG steganography using base encoding and pixel swapping technique. Multimedia Tools and Applications 82: 14945–14962. doi: 10.1007/s11042-022-14072-8

Mathivanan P, Maran P (2023). A color image encryption scheme using customized map. The Imaging Science Journal 71(4): 343–361. doi: 10.1080/13682199.2023.2182547

Metaxas T, Gallego JS, Juarez L (2023). Sustainable urban development and the role of mega-projects: Experts’ view about Madrid Nuevo Norte Project. Journal of Infrastructure, Policy and Development 7(2): 2161. doi: 10.24294/jipd.v7i2.2161

Saqib A, Chan TH, Mikhaylov A, Lean HH (2021). Are the responses of sectoral energy imports asymmetric to exchange rate volatilities in Pakistan? Evidence from recent foreign exchange regime. Frontiers in Energy Research 9: 614463. doi: 10.3389/fenrg.2021.614463

Srbová P, Režňáková M, Tomášková A (2023). Socially responsible activities and the economic performance of family businesses. Journal of Infrastructure, Policy and Development 7(1): 1958. doi: 10.24294/jipd.v7i1.1958

Yumashev А, Mikhaylov А (2020). Development of polymer film coatings with high adhesion to steel alloys and high wear resistance. Polymer Composites 41(7): 2875–2880. doi: 10.1002/pc.25583

DOI: https://doi.org/10.24294/jipd.v7i3.2223


  • There are currently no refbacks.

Copyright (c) 2023 Alexey Mikhaylov

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Creative Commons License
This site is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.