Is Cryptocurrency Trading Safe? – Risks And Precautions
As an industry, cryptocurrency trading had its share of downfalls and intrigues before it became a preferable form of investment. These pitfalls evidently slowed the trip to becoming the success that it is now, but the questions and doubts from keen traders and investors remain. Is cryptocurrency trading safe? How efficient is the system to guarantee account security and profit?
These questions are valid because it deals with your hard-earned money. So, choosing the right cryptocurrency exchange platform is a good start. This move is essential because it can either make or break your earning potential and secure your initial capital from fraudulent transactions. Beginners may also face many tempting yet high-risk opportunities in cryptocurrency trading. You have to equip yourself with the right measures and come up with a strategic action.
Minimizing the risks
The cryptocurrency market is highly volatile. It takes a lot of experience and research to get the hang of the process. Because of its rapidly changing price movements, a coin may be profitable now and at a loss the next day. To protect yourself from grave losses, a beginner should go for currencies with a proven track record on liquidity and market capitalization. It ensures that you are making a lower risk for your initial capital. For example, start trading with Bitcoin and Ethereum because of the demand they get through time.
Altcoins are not advisable for starters due to quick surges and downfall. The likes of Bitcoin will also be easy to sell when you wish to take that position. You can research further on the popular and well-maintained cryptocurrencies today and read more about reviews and profitable ways to earn with them.
For experienced investors who have spare money to risk, you can also go for newcomer altcoins as they yield more profit because of their cheap rates. Asset distribution is key to managing your risks. That way, you can be sure that you are not going to lose all your investments by one swing of the cryptocurrency market.
Knowing the signs
Most of the time, the more tempting an offer is, the more questionable its intentions are. The same principle applies to cryptocurrency trading. You cannot merely be convinced by guaranteed profit promises within a short span of time. Ponzi schemes and hacking incidents took millions from a number of traders, and there’s no way to take it back.
You should shield yourself from these types of scammers and know when and when no to trust a company’s profile and package. Look for signs that prove a project is up to no good. The first indicator is when the founders and developers are not known people in the industry. When you research them, there'd be no available information about them. Countercheck the websites that appear as well. The worst-case would be framing identities and creating false articles that may deceive you.
Next, an over-the-top cryptocurrency trading project offering smells like trouble right away. Companies are also trying to balance supply and demand to maintain their status and last long in the market. So, you can easily doubt anything that guarantees 30% returns in a month.
It is also possible to have your account stolen without the need to hack, so here's a pre-empted solution for you: please do not click or say yes to any "free offer." Most of the time, it will require you to deposit some money, and the next thing you know, you're caught in an evil scam. Always be vigilant and rational.
Securing your crypto wallets
Your crypto coins and tokens have a digital storage called wallets. It allows you to transfer and manage your funds conveniently as long as you are online. This small glitch of demanding for an online access is prone to hacking. So, it is best to enable your two-factor authentication feature as an additional security requirement. You should also save your passwords both online and offline, so you won't have an excuse for ever forgetting them.
There is another type of wallet called a "cold" wallet that resembles a flash drive. You can keep a part of your assets in here to protect them from cybercriminals.
Protecting your account
The primary things to do when it comes to your investments might be the same things you compromise without your knowledge. For example, using public Wi-Fi service to check your finances is a grave mistake. It makes it easy for hackers to get in the way of your transactions and take away your cryptocurrencies.
Investing in cryptocurrency should include investing in a home network with the proper security measures executed. Create a unique password and limit the users who can connect to it. A wise additional protection is going through the transactions using an encrypted VPN channel. You can quickly research the most-used and reliable product out there and take advantage of its perks. If you are using your mobile device, it is best to install additional security measures in the gadget. Get more cryptocurrency trading safety tips here!
Cryptocurrency trading has its own share of worries, but it can be a safe space to make a massive profit from your investments. With the tips you learned today, you are up for a good start. Remember, letting your senses be instinctive and speculative helps you start at a stable pace. It would help if you backed it up with independent research, asset distribution, strategic planning, and security measures.
When it comes to financial investments, there is no such thing as an overly secured account. At the end of the day, it is your compromises that will put you into trouble, and you have no one else to blame. The cryptocurrency industry will eventually pay you forward with profits, so there is no need to rush your success.
UPDATED April 6, 2021
By: Hunter Shultz
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