The primary motivation for writing this paper on the chosen topic is the tremendous growth that the cryptocurrency market has achieved over the past decade. The cryptocurrency market has become one of the most desirable places for investment. For this reason, it is interesting to uncover the reasons behind such significant market growth. The paper will primarily focus on analyzing the risks of investing in cryptocurrencies and will also analyze potential returns. The main interest of investors is achieving high returns, which the cryptocurrency market certainly enables. Insights into possible returns on cryptocurrency investments will be explained using Ethereum as an example. Due to the high potential returns, the market also carries significant risks such as security risks and high market volatility. This will be preceded by a description of the basic features of cryptocurrencies and the blockchain technology that underpins them. The functions of cryptocurrencies and their usage will be explained, and some of the most popular cryptocurrencies and their technological and application differences will be mentioned. Additionally, risk management strategies that allow investors to reduce potential losses will be briefly described. The cryptocurrency market will be compared with traditional established financial instruments to analyze the profitability of taking on greater risk in the cryptocurrency market compared to the risk in established investment options. Investing in cryptocurrencies can undoubtedly yield substantial returns, but it requires thorough research and awareness of all market aspects to make informed decisions that will minimize potential losses.