Ignorance of the nuances of working with the crypto market can lead to a loss of funds when making the first transaction. So how to protect yourself from losses, crypto scams and start working competently with digital assets? Let’s try to figure it out.
Crypto investing is associated with high risks, primarily because digital assets are highly volatile. However, this is far from the only reason that can lead to losses. There are other nuances to consider before purchasing digital coins.
Spontaneous purchase
Before buying a cryptocurrency, you should first understand what it is for: is it a long-term investment or a tool for speculation. The point of entry into the asset and the strategy of market behavior will depend on this. According to crypto experts, the secret of successful trading in the market lies in correctly determining when it is better to buy an asset and when it is better to sell it.
It is essential to think in advance about how to act in the event of a sharp collapse or rise in the price of a cryptocurrency. In case of drawdowns in quotations, traders can act impulsively. Therefore, you should decide in advance on the reaction to emergencies, having designated for yourself the profit or loss fixation levels.
Many experts also believe that a relatively safe and win-win time to buy bitcoin is when its price is 80–90% below the historical maximum value, the so-called ATH (All-Time High).
Black market
The number of chats for OTC digital currency trading continues to increase in the Telegram messenger. Such sites usually have their own system of recommendations and reviews, but there are no guarantees. The extent of crypto scams on Telegram is so significant that the IRS has paid attention to it.
Because of this, buying cryptocurrency on Telegram and other unregulated OTC markets is considered one of the most unreliable ways to become the owner of digital assets. As you might have guessed, you can easily become a victim of a crypto scam.
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And if you want to learn more about crypto exchanges in Telegram, you should definitely read our article “Crypto Exchanges in Telegram: What are They and is it Worth Dealing With Them” on the LATOKEN Medium page.
The most reliable method of buying cryptocurrencies is considered to be conducting a transaction on a large centralized exchange that obeys the requirements of regulators and identifies its customers (KYC), counteracts money laundering (AML) schemes, and other crypto scams. For example, LATOKEN is one of such reliable crypto exchanges.
Unsafe storage
After buying a cryptocurrency, the investor faces the question of its safe storage. Even if the coins were bought on some crypto exchanges, leaving the tokens on the exchange wallet may not be the safest option. This is because the addresses used by exchanges to store assets usually contain large volumes of cryptocurrencies, which attract crypto scammers. In this case, you must be sure that you can trust this particular crypto exchange, like you can trust LATOKEN. Want to give it a try? Then visit LATOKEN exchange!
If you want to learn more about safe crypto storage, check out our article “LATOKEN Review: essential rules for safe cryptocurrency storage.”
Often, cryptocurrency exchange wallets become targets of hackers and crypto scammers. For example, the largest attack in the history of the crypto industry is considered the hacking of the Mt.Gox exchange, resulting from which digital assets worth more than $450 million were stolen (at the exchange rate at the time of the attack). Because of this, the exchange went into liquidation.
One of the safest ways to store cryptocurrency is a hardware wallet. You should make a backup copy of the seed phrase (a set of random 12, 18, or 24 words to restore access to the wallet). Typically, the seed phrase is printed on paper and kept along with important documents.
LATOKEN cares about its clients and more than once touched upon the topic of crypto scams and ways to avoid becoming a victim of such fraud.
You can find more relevant information in the article “How to Avoid Crypto Scams: Essential Tips from LATOKEN.”
About LATOKEN
- Ranked #2 worldwide in the startup tokens primary market with 220+ IEO’s since 2017.
- Has over 2 mln registered users, over 1 mln Android app installs.
- Is in the TOP 10 of CoinGecko rank by the amount of token pairs and coins listed.
- VCTV, a live streaming panel with high-profile industry leaders, produced over 500 shows to advise traders and investors how to navigate the crypto world with discussions, news updates, and interviews.
- Advisory Board includes former CFOs from JP Morgan and Paypal.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.
