Cryptocurrency has become a popular phenomenon these days and investors across the globe are investing in it. But there are certain challenges too in the crypto business and one of the leading concerns for crypto users is scams.
Certain people are always looking to take advantage of illicit activities in the crypto market. According to certain reports, a total of around $1 billion was lost in 2021 because of crypto scams which is indeed a worrisome figure.
As a crypto investor, you would never want to fall victim to a scam to protect your crypto wealth. There are certain tips which you can follow to avoid such challenges and save your crypto profile.
Let us find out some top ways to avoid crypto scams.
When you are looking to invest, the first thing experts recommend is to do research. Getting aware of the nature of the asset in which you are investing is the first step towards a successful investment.
Knowledge is power, so you should do ample research before investing. You should ensure that the regulations to which you are handing your money are secure and has government approval.
Cryptocurrency has been favored by many global leaders and celebrities as the best alternative to Fiat or traditional currency. One such global leader who is making headlines is Carl Runefelt, alias, The Moon.
He believes, “I know that for the fact that you cannot hack Bitcoin. You can hack exchanges which is something different but not Bitcoin. It’s important to understand that you can hack YouTube, you can hack banks or any internet company out there, but you cannot hack Bitcoin. This is because the blockchain is very robust.”
Invest What You Can Afford
Cryptocurrency is a tempting investment with a great potential for reward. Investors around the world have made a lot of money with cryptocurrencies which is indeed an interesting fact for crypto enthusiasts.
Since there are chances for scams in the crypto world, you should be careful about your investment. It would never be a wise decision to start your crypto journey with losses.
You should remember that sentiments play a crucial role in the crypto market so you should avoid securing your investment. Sometimes, big investors create hype around a particular cryptocurrency to increase its investments.
But once this hype is over, the value of that particular crypto can fall quickly and you can suffer from losses. So, instead of putting all your money in a cryptocurrency, you should invest what you can easily afford to lose.
Likewise, you should look at the trading charts of a cryptocurrency to find out whether it is a stable currency or not. This strategy will help you avoid scams even if people try to lure you into one.
Also Read: How to Avoid Cyber Fraud in Metaverse
Diversify Your Portfolio
Cryptocurrency is not limited to Bitcoin (BTC) as there are thousands of other digital currencies available too for investment. You can pick any digital currency to buy as there is no limited access to any cryptocurrency.
One of the most remarkable ways to avoid scams in the crypto business is to diversify your crypto portfolio. You should invest in multiple cryptocurrencies to not only make maximum profits but to protect your wealth too.
Carl, on his YouTube channel, The Moon, emphasizes, “Sell coins when they hit the top value and purchase another coin, take your profits, and buy other coins as cryptocurrencies are highly volatile. This applies to everything, whether it is Bitcoin or any other coin.”
When you own multiple cryptocurrencies, you are in a better position to trade them. Even if the value of one virtual currency is going down, you can earn benefits from other digital currencies.
Never Share Your Key
A crypto wallet is a place where you can save your crypto assets. There exist two types of crypto wallets: online and offline.
An online wallet is one that you get on the crypto exchange when you start trading cryptocurrencies. On the other hand, you can purchase an offline wallet to store your crypto wealth and you can keep it anywhere.
Now one thing you should remember is that there is always a key to your crypto wallet. If you lose this key, there is no way to recover it and anyone can access your crypto funds.
So, to avoid scams in the crypto business, you should protect your crypto wallet key.
Cryptocurrency is relatively a new currency as compared to Fiat but has already shown its potential for changing the existing banking system.
Complaints have been made in the past over losing money to scams in the crypto market since scammers are always ready for fraud.
You can follow the above-mentioned tips to protect your crypto wealth and comprehensively avoid scams.