In the last couple of years, Cryptocurrencies have become a big phenomenon among many people of different age groups, starting from eighteen up until 80, and even more. Some of the things that attract people in buying Cryptocurrencies are the technologies behind them. Fast transfers without anyone to supervise or control the transfers made, the freedom to control and use your funds the way you want, and the desire to diversify your portfolio in assets other than fiat currencies, stocks, and commodities to open your horizon to new technologies and products, and of course, the possibility that the price of the Cryptocurrency will increase with the opportunity to make a gain out of it.
Following all the above, it is important to mention the risks involved when buying Cryptocurrencies. The first and most obvious one is the risk in the change of the value of the Cryptocurrency someone buys. For example: if the price of 1 Bitcoin was worth 42,232 USD on the 10 of March 2022, today’s worth of 1 Bitcoin is 18,473 USD meaning, that on every 1 Bitcoin someone bought, he/she has lost more than 20,000 USD! That is a lot! It should be noted that this is one of the main reasons investing/trading/buying Cryptocurrencies is considered Hight Risk product, for speculative purposes and not an investment that can fit most people.
Another main risk is that anyone who considers buying Cryptocurrencies needs to take under consideration and prioritize the scams/frauds that are very common these days.
In this article, we will mention a few of the most common frauds you may phase see these days out there, and we strongly urge the general public to pay very high attention to:
1. Receiving calls from unknown people claiming to represent dealers/brokers and promising you high returns of profits/returns if you purchase Cryptocurrencies: as mentioned above, one of the most obvious risks in Cryptocurrencies is the high fluctuation in the Cryptocurrency price. In the example provided, it was outlined how the Bitcoin price dropped more than 56%, meaning this caused a loss of more than 50% of the Bitcoin price only in a six (6) month period. It is important to know that no one can predict the Cryptocurrency price!
2. Unknown people requesting remote control access to your personal computer and card/bank details: Never provide remote access to your computer and/or never provide your bank/card details to anyone you do not personally know and trust. Many online scams/frauds start with people giving remote access to their computers/bank details to unknown people. By doing so, you are starting a chain of events you do not have control of, as those people can perform actions you cannot control.
3. Using Crypto wallet addresses, you do not have 100% access and control of: By using Crypto wallet addresses you do not have access and control of, you are giving access to your Cryptocurrencies to someone you do know. As you would not give access to your bank account to someone you do not know, you should never give access and/or use a Crypto wallet address that you are not the holder of it.
4. Using unregulated/unlicensed brokers: it is always recommended to use the services of licensed/regulated entities. By doing so, you know that a state authority controls and monitors the activity of the broker you are using, and you can decrease the exposure of getting defrauded by unregulated companies.
The purpose of this article is to explain to the general public the risks involved when buying Cryptocurrencies. Any decision you will take while deciding to buy Cryptocurrencies, you should also take into consideration all of the risk factors outlined above for the safety of your funds. It is important to take knowledgeable decisions while entering the Cryptocurrency world.