Here is an answer by John Hwang, Former Senior Options Trader at Morgan Stanley. He originally published his ideas ion Quora and later they appeared on Forbes.
#1 Unmitigated exposure to insider trading and pump and dump schemes
As cryptoworld still lacks regulation, there are no concrete lists of rules that should be followed by all market participants. Hence, schemes that can be barely called legal evolve.
#2 The lack of deposit or security insurance
In cryptoworld, there are just no insurance institutions yet. The only exceptions are Coinbase and Gemini, which only insure cash (meaning your crypto assets are not insured) deposits.
#3 Not backed by any revenue, assets, or business model
It is impossible for most crypto project to carry out an adequate valuation basing on traditional methods. Revenues of crypto projects are either negligible on this stage or too hard to estimate. You might apply a comparative approach but it still has too many limitations (overall market condition, no clear borders between subindustries).
#4 The constant risk of irreversible, permanent loss
Loss of private keys is a nightmare of every cryptotrader. If someone gets access to it, just consider your money gone.
#5 The lack of price consistency across exchanges & order protection
With cryptocurrencies, the best bid offer is all over the place, and exchanges have no legal obligation to price match or price improve. Arbitrage opportunities appear quite often. It is not exactly negative. You can take advantage of this inefficiency by building a multi-exchange trading robot.