COIN-SPECIFIC (IDIOSYNCRATIC) RISK Coin-specific risk refers to the isolated risk of a single coin or token in the cryptocurrency market, influenced by factors specific to the project itself. If for example, a project experiences a negative event (such as network failure or running away with investors’ funds), then the coin holder that invested in that project will be a victim to the project-specific risk. Coin-specific risk can be reduced through diversification. The fact is that in the investment marketplace, risks is as much an incentive as it is a red flag. Conventional financial wisdom states that the higher the risk, the greater the expected returns. It’s no surprise that cryptocurrencies are the riskiest investments you can make.