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The cryptocurrency industry continuously progresses. It may have ups and downs, but most crypto enthusiasts and experts do not see it will end soon. Most people even believe that it is the future of the financial system. That is why investors keep coming, hoping they profit from trading cryptocurrency in the long run. With the increasing number of crypto investors, however, scams and other fraudulent activities involving crypto became rampant. How to protect yourself from these? Well, they say knowledge is power. Get informed and watch out for these ten things before starting your crypto account.
1. Hyped coins
Before signing in to a crypto account, you need to know which crypto you want to invest in. You put yourself at risk if you don’t know enough about cryptocurrency. Remember what most experts say. Do not invest in something that you do not know. Otherwise, you are prone to get hooked on fake coins.
Bogus coins use the power of false information dissemination to lure new crypto investors. They will use social media platforms such as Facebook, Twitter, or YouTube to hype the coins they are trying to sell. The more people they get to invest, the more money they can bag. Why do people invest? Most victims get attracted to the high return it offers. Hearing testimonies from other investors is also a significant factor in why they invest. This tendency comes from the Fear of Missing Out or FOMO.
Other projects use the power of influence of celebrities to gain investors. They tend to associate the trustworthiness of the celebrity with the coin they endorse, which is illogical. Since the endorsers are famous and have the public’s trust, investors think that the team behind the project will never betray them, knowing that even the celebrities trust them.
2. Too good to be true
If it is too good to be true, then it is. As an investor, think twice about what they offer or promise. Succeeding in cryptocurrency and even in other industries or markets requires effort. Do not bite into projects that promise a huge profit in an instant. Always be realistic. Know if what they promise is doable or feasible. To do so, you must go into the specifics of their work, such as reading their whitepaper and researching their roadmap or use cases. Having said this, you should also check whether they are true or just fabricated.
3. Fabricated whitepaper, Roadmap, and use case
A whitepaper is a document that discusses the goal and operation of a project. A roadmap is a high-level graphic summary that aids in outlining the vision and course of a coin offering over a predetermined period, while a use case refers to the practical application of a coin. Before you close that registration from a crypto account, check if your target coin has genuine versions of it.
Most scam projects target investors who are not technically knowledgeable in crypto technology. So, they use highfalutin terms or jargon to impress the readers and give them the impression that their project is authentic or 100% working. It is easy to fall into this trap if you are not informed. So before you even create that account, at least ensure you already have a basic knowledge of the crypto mechanism.
4. Volatility
In investing in crypto, remember that timing is everything. So before you start that crypto account, ensure that the market is favourable for new investors. Otherwise, you might end up losing a significant amount of money. Remember that you can lose a lot of money in just a day in cryptocurrency. That means you have to be extra careful.
5. Scam platforms
This is the best mechanism for scammers to get some money from investors because they hold the accounts of these people. In just a blink of an eye, they can put their hands on your pocket, not to mention other sensitive personal information they got from you. That is why, before you create that crypto account, ensure that you are joining a legitimate platform. There are many legit platforms out there that either facilitate the crypto exchange or connect you with reputable and regulated crypto brokers. But to name some, you can check Binance, Kraken, BitiCodes and plenty more.
6. Scam ICOs
They are alluring since investors can make an enormous profit with little initial investment. ICOs are just a plan that has not yet been executed because they need capital to run it. So, they get it from investors willing to give some money, promising that with their help, they can get started. And as the first people to invest and trust them, they offer returns above the average. However, the problem comes in when these ICOs suddenly disappear like a bubble.
7. Fake online community
Investors who already have a cryptocurrency account and a coin rooted in tend to follow the herd they feel they belong. However, not all communities you join are legit. Some pretend to gain your trust and eventually get essential personal information from you to hack your account or scam you in various ways.
8. Price manipulation
Supply and demand have a significant role in determining the value of cryptocurrency coins. Crypto whales are particularly adept at effectively manipulating the cryptocurrency market to their advantage because of their enormous size. And some fake projects alter the price projection on their charts to lure investors into buying. Before starting trading, ensure that you know these basic scams.
9. Fake reviews
One of the sources investors go to before signing into a crypto account is the reviews to double-check if the coin or platform they want to use is not bogus. However, not all reviews you see on the internet are real. Some of these are paid reviews aiming to sell a particular coin or platform. Always check the reliability of the website.
10. Self-proclaimed experts
Before starting a crypto account, most people research first. And they get convinced by self-proclaimed experts they read or watch on the internet. Be careful because not all of them are real experts. Some of them only do it to favour a particular brand of platform or coin. Some do it for the views. And some of them are just paid to do that. Be careful.
Closing Thoughts
Entering the crypto market is not an easy thing. Be wise because your hard-earned money can vanish in a blink. Ensure you take note of the things to watch out for before even starting a crypto account.
(Press Release)
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