The journey of life has a lot of pitfalls to overcome. It is never a linear path in life to reach the success that you want. A significant part of it could be due to financial reasons. Liquid money, for the most part, is very motile. The truth about most cases while trading crypto is that it is not always a smooth path to forward with.
The landscape of investing has changed drastically throughout the years. It is becoming more difficult for people to safely support and transact their money in the world of crypto. Go URL to know more about the world of crypto and its various hurdles. Getting back to security, the internet is not once what it was when it first began.
Fair play because the internet has become the very thing it was intended for—an extensive network with an easy flow of information. But as with every good thing, there are always downsides and pitfalls to this as well. It is not always sunshine and rainbows on the internet.
You are pretty likely to find many negativity and hurdles before you end up achieving success while trading online. This extensive network can have many crevices, among which are the lurkers, the ones who wait to scam traders, and investors who are remarkably naive or ill-educated on the intricacies of crypto security.
Cryptocurrencies are already moving steadily and will be recognized as a national currency soon in many nationalities. This is the period where most of the scams will happen and for a good reason.
Scammers will want to get their hands on as much crypto as possible, as once these virtual currencies are recognized worldwide, they will be of more use than they already are. That being said, let’s take a look at the top crypto scams that are the most commonly occurring ones on the internet.
How To Spot Crypto Scams That Are Most Common
- Spoofing legitimate websites
One of the most common ways that scammers get their way with you is by spoofing original sites on the internet. Most people on the verge of being scammed get various mails and phishing attempts in their way, and this is one of them. They also make use of social media and other platforms to scam you into buying fake cryptocurrencies.
- False promises
Now that you know what the ways they use to scam are, the how is quite different. Any attempt at scamming you will go along the lines, “send me some crypto, and I will give you ten times back.” Remember, transactions on the blockchain are irreversible. Once you send crypto, it’s theirs. So if there’s a promise of a considerable return, always beware by looking for the authentic brand of well-known companies.
- Fund managers
These are prevalent around social media like Facebook, for example, and all the posts look similar. They might start by telling a sob story about how they lost a lot of crypto by trading or how they’ve been previously scammed before.
But now, they have found a fund manager and their name XYZ Bob Smith or whatever that pops up in your Dm’s. They usually provide false information that looks trustworthy but are all fake if proper research is done to check its legitimacy.
- Forex Trading Scams
They usually have spam posts about making profits with forex and binary trading. Their primary targets are crypto and marginal investors. They primarily aim for your crypto exchange or promise of returns and include “proofs” of their returns to the various customers throughout their lifespan. But they are all false evidence and have most likely never happened.
Mistakes To Avoid While Trading Crypto
- Buying high and selling low
Fomo, or the fear of missing out, is the one thing in the world that has people parade around others like sheep. FOMO is one of the worst things to do while trading. This is because let’s suppose your friend has invested in a currency or crypto, and you see it shoot up as well.
In an attempt to jump on the bandwagon, you will end up investing in it at a high price. The next day once it drops, you immediately sell it off because you’re afraid that it very likely might affect you with losses even more. You definitely would want to avoid this habit.
- Dollar price average
One of the biggest mistakes that people make while buying crypto is that they invest their money in a venture or currency all at once. This can be a very disadvantageous thing to do in a volatile market because, logically, that much money in one experience in a single time will pretty likely cause more damage than good.
Instead, a better way would be to invest the entire thing into the venture at different points in time. This way, you spread your investments out and reduce the risks that you face along with it. We know that it sounds like a fancy concept, but it is a straightforward trick in risk calculations in truth.
- Borrowing money
Cryptocurrencies are highly volatile. And one thing to not do in a volatile market is that you never use borrowed money to fund your investment procedure. This is a hazardous step to take and will most likely end up causing more harm than good, to be very honest. Use savings or current money. Never borrow money to invest in it.
- All eggs in one basket
Another common mistake that most people make in investing is the lack of diversification in their investments. Instead of going for a few assets, start an investment portfolio and branch out into various other cryptos. Don’t jump in on the bandwagon and invest in the currencies only because everyone else is. One of the riskiest things to do is invest everything simultaneously and into the same thing. Branch out, lower risks, and get better rewards.