Cryptocurrency Investor, Protect Yourself!

Every cryptocurrency investor is a target of investment frauds with different forms. Whether you’re investing in Bitcoin, Ethereum, or other cryptocurrencies, you should carefully protect your investment. Scams are everywhere and become a significant threat aside from cybersecurity attacks. On the other hand, the volatile nature of cryptocurrency trading drives a high risk of investment losses. You should manage threats and risks with reliable protection to prevent you from losing money in cryptocurrency trading.

Comprehend The Nature of Crypto Market

The primary protection is by taking the knowledge about the nature of the crypto market as your principal. Yes, the fact that the crypto market is volatile isn’t a joke. Cryptocurrency is highly fluctuating, which makes it riskier than fiat currency trading. Some cryptocurrencies, especially the new ones, are even more volatile, so buying a token could be a safer investment. Cryptocurrency values can go up and down very dynamically. Please take it as your principle no matter what crypto pair you’d trade.

Hiring an investment lawyer is also an excellent mitigation step if you’re planning to invest in new crypto projects and digital trading currencies with regulated investment strategies. They can help you with valuable advice and handle investment complaints.

Read How Scam Brokers Operate

Acknowledge The Whole Concepts

When it comes to cryptocurrency, there are complex concepts you should acknowledge. Without comprehension of blockchain technology and how it works, investing in cryptocurrency would double the risk. Before tools or any assistance, your knowledge in cryptocurrency trading is fundamental protection. Investors of cryptocurrencies don’t know the coins’ actual value, making these digital currencies very volatile. You should also beware of investment scam sites that target digital currency investors. Increase your knowledge and keep updated with crypto market news.

Chances of Adoption

Cryptocurrency investment is highly speculative because it bases its value on the use of the coins for transactions. We can’t count on the adoption plan and progress of cryptocurrency while nothing is certain in this area. For easy understanding, either we or crypto issues don’t know where they will accept the digital currency, let’s say, as a strong-contending alternative or replacement of fiat currency. You should take this fact into account to protect yourself from investment losses when investing in cryptocurrency.

Read How to Recover Stolen Cryptocurrency

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Research on Adoption Factors and Applications

While the current crypto market is highly volatile, you can research adoption changes and factors. These include what kind of services or products backup their ICO to identify how people adopt the coins. Generally speaking, the more services and products needed, the higher score they have. For example, some successful ICO projects run browsing services required by (potentially) millions of people. Again, you should deepen your knowledge in blockchain technology to determine whether the investment would be profitable. You can also research other factors, including regulations, government, society, and the global market. Some applications may be contextually relevant to particular aspects but not for others.

Diversify Your Cryptocurrency Investment

The ultimate protection of your cryptocurrency investment is by diversifying your portfolio. Volatility is inevitable, but by recognizing the risks, you can manage preferences on digital currencies you want to invest in as well as the stake. You can diversify your investment by investing in multiple digital currencies instead of one.

 

cryptocurrency investment

Below are some steps to follow before actually making a digital currency investment:

  • You need to understand the digital coins you want to put your money on.
  • Develop your preferences and make a list of cryptocurrencies for your investment.
  • Go to the top three or top five to diversify your crypto investment.

Even though it would vary for each person, you can diversify based on blockchain technology, applications, acceptances, and so forth. You should beware that there’s no absolute measure of best practices, but the diversification allows you to manage the risks that double thanks to the volatile cryptocurrency market. As you invest your money in multiple cryptocurrencies, you will not lose all of your money if one of them drops.

Check The Airdrop

If you’re hunting ICOs instead of those “established” cryptocurrencies, then you must check the airdrop sites, which are legit references for such investment portfolios. These sites aren’t investment platforms, but they’re crypto coins or ICO distribution platforms that host various projects with stats and addresses. New crypto projects or ICOs usually promote their offering through an airdrop.

Airdrop sites provide investors with valuable advantages, especially the beginner ones. There, you can compare offerings from diverse ICOs conveniently and remove investor scam sites from your list. These sites have filter features and a user-friendly interface that allows you to review the offerings quickly. The platform hosts a direct link to the addresses to directly navigate to crypto projects’ sites that you’re interested in. Compared to randomly researching the offerings, you can save time and resources by using the airdrop sites.

Beware of Buy-and-Sell Strategy

While there are small chances to gain quick profit from established coins, many people try their luck on alternative currencies. This step is undoubtedly tricky as they usually invest a large sum of money to increase their coins’ value. They try to hype up the coins and might be inspired by the “blue ocean strategy” with a vision to elevate the value.
The idea is to buy cheap coins and sell them at higher prices as the strategy works. However, the timing is a fundamental element in this strategy and it’s still precarious. If you fail to hold and sell at the proper time, you’d likely lose your investment. Of course, if you make it, you’d potentially bank huge profits from your coins. The diversification rule is still applied even for such crypto holding strategies.

Verdicts

As you’ve seen above, high volatility is the primary reason why you should be protective of your crypto investment. In general, cryptocurrency investment possesses the highest risks among other commodities to invest in. The major attraction could have been the market pop that makes quick money for former investors but unlikely to happen again anytime soon. If you’re still interested in digital currency investment, diversification is a top-notch strategy to manage the high risk while potentially securing a sum of profits.

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crypto fraud

CRYPTOCURRENCY FRAUD – HOW IT HAPPENS AND HOW TO FIGHT IT

Ever since the launch of the first cryptocurrency, the entire industry has been embroiled in controversy. There is no denying that crypto is the cause of hundreds of rags-to-riches stories. But ,there is also an equal number of stories about cryptocurrency fraud. Also stories exist on how it has enabled scammers to make millions from unsuspecting investors and buyers. The profit potential of the market always draws people in. However.  if you truly want to real its benefits, you have to know how cryptocurrency fraud happens. And, how you can avoid it. If you are unable to do that, you will end up losing your hard-earned money.

Let’s take a look at how cryptocurrency frauds happen and how they can be avoided:

  • Fake crypto investment platforms

One of the easiest ways for scammers to commit cryptocurrency fraud is through fake websites or mobile apps. A lot of these software are out there. Because they resemble authentic crypto websites or apps, a lot of people don’t look too closely and fall into their trap. However, there are ways for people to identify such websites, which include checking the URL of a website to ensure it has ‘https’ in the site address and there is a lock icon next to it. Similarly, you should ensure there are no changes in the URL at all.

As far as mobile apps are concerned, scammers make fake apps that have similar names and user interface as the authentic ones. Before entering your log-in credentials on any platform, you should ensure whether the app or website is secure or not.

  • Giveaway scams through social media networks

Misleading tweets on Twitter, posts on Facebook or giveaways on Instagram can also be used to commit cryptocurrency fraud. If you come across a social media post that offers a cryptocurrency deal, which seems too good to be true, the chances are that it is fake. Even influencers will advertise giveaway schemes, asking you to send a little crypto to the address provided, and they will send you five times more. This is just another elaborate fraud.

  • Scamming emails, technical support, phishing and impersonation scams

These are some of the most common ways to commit cryptocurrency fraud and most people have come across it at least once. Everyone gets a lot of spam emails or calls that are impersonating an officer from your bank. Their aim is to fish out your sensitive information, such as login credentials. As far as cryptocurrency is concerned, scammers pretend to be from your legitimate crypto wallet or platform and have identical branding and logos. They usually comprise of malicious files or links, so you should always avoid clicking on a link inside such messages or emails.

In fact, some cryptocurrency frauds go as far as announcing fake initial coin offerings, or ICOs, for stealing funds. You should never fall for these fake website offers and should take some time to go over the details. It is also recommended that you never share your passwords or security codes and make use of 2-FA (two-factor authentication). Ignore outbound calls asking for your confidential personal information because it is possible for scammers to poof legitimate phone numbers. Never give remote access to your device to anyone.

  • Investment frauds

Another common cryptocurrency fraud involves scammers setting up seemingly legitimate platforms, which claim to offer mostly unrealistic and high returns in exchange for sending cryptocurrencies. In such situations, you should be skeptical because the returns are mostly unrealistic. You should always send cryptocurrencies to trusted and known third parties only. If you contact someone new, research the exchange or organization thoroughly before trusting them with anything.

  • Initial Coin Offerings (ICOs)

Similar to how IPOs work in the stock market, ICOs, or initial coin offerings, are essentially fundraising mechanisms that are used for newly launched cryptocurrencies. Those who invest in ICOs are given tokens in the new venture. Billions of dollars are poured into ICOs on a yearly basis, but not all ICOs are legitimate. Some scammers have used them to commit cryptocurrency fraud and investors later discover that these ICOs don’t have any technology or real business plan behind them. Therefore, you need to be extremely cautious before investing in ICOs, regardless of how great promises they make.

  • Unregulated exchanges and brokers

There are hundreds of unregulated online brokerage firms and exchanges that offer cryptocurrencies and other crypto trading products. But, these are also a way of committing cryptocurrency fraud, so it is essential for people to be wary of too-good-to-be-true promotions and promises of get-rich quick schemes because this could be just another cryptocurrency fraud. Once you have invested money in such firms, they will charge you outrageous commissions and can also make it immensely difficult for people to withdraw funds. In the worst-case scenario, these unregulated brokers and exchanges will steal your money.

  • Mining frauds

It is possible for any regular investor to mine cryptocurrencies through cloud mining, which can work without expensive hardware. There are many cloud mining services that allow users to rent server space at a fixed cost for mining altcoins. This can come off as a very lucrative option for mining altcoins while sitting at home and not having to invest in hardware. However, you should bear in mind that not all of these services are genuine and you could end up becoming a victim of cryptocurrency fraud.

How can you identify the frauds? One way to go about it is to see if they are making any lofty promises. The fraud ones tend to make promises of high returns on your investment and don’t mention any hidden fee that might be applicable on the returns. Moreover, their systems are smart enough to keep on sucking money from the unsuspecting investors.

You should always be vigilant when you are investing in the crypto industry in order to avoid becoming a victim of any kind of cryptocurrency fraud.