For some time, the euphoria that reigned in the market has changed drastically into panic. The price of bitcoin (BTC), and as a result almost the entire crypto market, shows little positive. The markets again took a hard hit the day before yesterday.
This will be an uncertain period for investors. Especially people who bought at the peak of the bull run. Being underwater is never fun, but with little experience in the world of crypto, this feeling can be reinforced. In addition, there are always people active in the world of cryptocurrencies who do not want the best for these new investors.
That is why we give you three tips to protect your capital in the crypto market. Which is very important for many people right now.
Watch out for crypto scams
Unfortunately, it is far too common for people to be scammed. It often involves three commonly used ways to take investors’ money. The three most common scams are: Fake giveaways, trading bot scams and the well-known phishing emails.
The fake giveaways are often people on social media asking people to deposit crypto to a certain address. The scammers would then magically refund double, or more, this amount. Obviously this never happens and gullible investors end up with an empty wallet.
Trading bots are algorithms that trade in crypto almost completely automatically. Often with large profit margins as a result. These trading bots do exist. However, often these are only intended for the large institutional traders. Websites sometimes advertise that they offer a trading bot for an affordable price.
The problem that often occurs here is that such organizations operate as Ponzi fraud. As soon as enough people buy the product, the scammers disappear like snow in the sun. Again, victims end up with an empty wallet.
Phishing emails actually speak for themselves. This type of scam is also common outside the world of crypto. Do you receive an email from an unknown sender? Then never click on links. Most likely it concerns phishing emails.
Pump and Dump groups
Anyone who dares to invest in crypto will encounter them sooner or later. Social media groups such as Telegram promote the fact that they agree to ‘pump’ a coin or token together. Anyone could get rich with this. The coin in question will rise hundreds if not thousands of percent and participants will make a huge profit.
Does this sound too good to be true? That’s because it is. Pump and dump groups do not aim to bring profit to the ‘ordinary’ investor. It’s just about one thing. To provide the organizers of such groups with profit.
The organizers have long bought the coins when they give the signal to the sometimes thousands of members and when the price rises enormously they dump their coins on the unwitting participants. The organizers make an absurd amount of profit, while the majority of the participants lose money.
Is it possible to make gains in pump and dump groups? Yes, the chance is small though and mostly based on luck. Be very careful with this.
Never store details of your crypto accounts digitally
This mistake is made very often. When creating wallets or creating passwords for exchanges, new investors often create a digital copy of this crucial information. This could be a photo on your phone or laptop or saving such information to a file on your computer.
The risk with this is that hackers gain access to this information when they break in. Not only will your computer or phone be hacked, but such malicious parties suddenly also have access to your wallet!
Writing down such important information is of course extremely important. Just don’t do it digitally. There are many options for solving this. Pen and paper, for example, is already a lot safer than a notepad file on your Windows PC.
Remember that the world of crypto is full of opportunities. However, scammers and hackers will take every opportunity to take advantage of the lack of experience of many new investors. The world of crypto offers everyone the opportunity to earn a nice pocket money, but stay on the lookout and beware!