Every vertical out there in the digital space is susceptible to flaws and cryptocurrencies are no different. As an idea that is brimming with investment potential, it has also attracted unscrupulous entities looking to capitalize upon a potential trader’s hunger for success. Especially since cryptocurrency trading is chock full of technology and jargon that most people are not familiar with. It is imperative that cryptocurrency investors are aware of some of the common frauds that take place and exercise caution when they engage in trading activities.
Research investment opportunities carefully:
Investors should carefully scrutinize exchanges prior to opening accounts. The best course of action is usually to open accounts in multiple exchanges where tenable opportunities exist. The cryptocurrency industry projects news on a regular basis for new products and exchanges. This information can act as a window into market trends and help investors capitalize upon opportunities.
Fake wallets:
Diligence must be exercised when it comes to choosing wallets. Only use tried and trusted sources especially while choosing wallets from the Google Play Store. Unscrupulous sources often use wallets to dupe investors of their hard earned money. Using an offline wallet that has been verified is usually the best course of action. Never store your investment in an online wallet or on the exchange.
Pump and dump schemes:
The mainstream rhetoric is that cryptocurrencies are a bubble. However, this is a misconception due to a lack of awareness about how they function. Bitcoin has become relatively stable, but smaller altcoins are especially more vulnerable to pump and dump scheme due to them becoming a haven for speculative investors. As far as investments go, Bitcoin is relatively more stable vis-à-vis some of the newer altcoins. Investors must also consider looking at Stablecoins apart from Bitcoins if they want to avoid speculative trading.
Bitcoin trading systems:
Cryptocurrency exchanges that trade against fiat currencies often imbibe an expensive withdrawal process. Apart from that, they have an extensive KYC process where there is scope for an identity theft by unscrupulous elements. The cost involved in the process of arbitrage usually negates the potential for high profits in such exchanges.
Conclusion:
As with any new technology, there are pros as well as cons. Investors in cryptocurrencies must exercise caution and scrutinize their investment options carefully before engaging in trading. As the market matures, it is expected that there will be more safety and stability. Binex.Trade is an upcoming exchange that trades only against cryptocurrencies and shares its trading commission among investors. These steps ensure that transparency and confidence in the exchange is maintained.
Visit us at https://binex.trade/ for more information, while 5 BEX tokens are awaiting you at the pre-registration.