Bitcoin set off a decentralized revolution allowing users to have control over their own money. Of course, this also comes with an even bigger set of responsibilities to avoid scams and secure their coins.
From ransomware to fake exchanges, criminals have taken advantage of the unregulated nature of Bitcoin to steal low hanging fruit. This is why you need to always be on high-alert when investing and trading cryptocurrencies.
Stick To The Most Reputable Platforms
As Bitcoin should be treated as cash, you need to be careful who you hand it over to as they can just disappear into the void. Look up what the most reputable cryptocurrency trading platforms are before you trade. If you have any doubts about an exchange, exchange in small amounts and withdraw the funds to a wall you have control over.
Don’t Store Crypto In The Exchange!
Even if you trust your regular crypto exchange, wallets can be hacked and your Bitcoin will not be recoverable if stolen. Just take a look at what happened to Mt. Gox, and the victims are still waiting for justice years later.
Opt for a hardware wallet if you want a secure long-term storage solution. Some models support multi-factor authentication just in case one security methods gets breached. You can also put a time lock on it to prevent coins from being spent before a certain date.
Don’t Be a Sheep
Just because a hoard of people on social media says that a certain investment or website is safe doesn’t mean it’s true. Lots of influencers are easily bought off by the highest bidder to promote shady crypto investments without looking into them.
Use your own noggin’. If something sounds too good to be true, then it probably is. Anyone can fabricate anything online at a whim so don’t be just another sheep to fill their pockets.
Bitconnect was one of the most infamous cryptocurrency scams and it was perpetrated by Youtube and Instagram influencers. Even the FBI had gotten involved with this scam after the damage had already been done.
Utilize Stop Orders
Exchanges will usually have a stop/start order future and you should take advantage of it to mitigate losses. This allows you to place a wall to prevent buying above a certain price or selling below. This should allow you to do some manual day trading without closely monitoring your computer by using trading bots.
Don’t Stray Too Far Into Altcoins
There are so many new and interesting coins that come into the market, but don’t get too invested into what strays away from the norm. The market tends to consolidate into Bitcoin while the majority of altcoins drop out. Even some of the most intricate coins that were popular in 2017 are now worth practically nothing, so don’t invest with emotion and hysteria.
Wrapping Up
The cryptocurrency market is mostly unregulated and immature compared to most other financial markets. While many may be encouraging you to hold forever, don’t put all of your eggs in one basket and prioritize necessities in real life over virtual currencies.