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How To Reduce The Risk Of Being Scammed When Investing In Cryptocurrency

Thousands of cryptocurrency investors in over 175 countries lost their money in 2017 when they put nearly $4 billion into a virtual currency known as “OneCoin.” This Ponzi scheme, which promised massive returns from investing in a digital currency that did not actually exist, ultimately resulted in the arrest of its leaders and left many people without their life savings.

If you’re thinking about investing in a cryptocurrency and want to buy crypto on Changelly, it’s essential to be aware of the risks involved. While crypto-assets have the potential to offer high returns, they are also highly volatile and susceptible to fraud. In this article, we’ll take a look at some of the steps you can take to limit your exposure to risk when investing in crypto-assets.

1. Do your research

Before investing in any asset, it’s essential to do your research and understand the possible risks. With crypto assets, it’s imperative to be aware of the potential for fraud. Many scams promise high returns with little or no risk, oftentimes these are Ponzi schemes or other forms of fraud. So, your first step is to check the reviews of other people about the chosen platform. However, don’t rely too much on positive ones. You should always think carefully before making a final decision.

2. Avoid investing more than you can afford to lose

Cryptocurrencies are high-risk, speculative investments that may experience significant price fluctuations. As a result, you should only invest an amount that you can afford to lose. This way, if the value of your investment goes down, you won’t be left in financial hardship. This is especially true for any new or unknown platform. You should start working there with smaller amounts and check how they operate before starting trading big.

3. Diversify your investments

When it comes to investing, diversification is key. This means that you shouldn’t put all of your eggs in one basket. Instead, you should spread your investments across a number of different assets. This way, if one of your investments decreases in value, you have others that may offset the loss. It also works with platforms and wallets. You can choose several reliable platforms for yourself and distribute your funds among them.

4. Use a reputable exchange

There are numerous cryptocurrency exchanges where you can trade your coins. However, not all of these exchanges are reputable. Some have been known to engage in fraud or other illegal activities. So, it’s crucial that you only use a reputable exchange. Look for a platform that has been in operation for a number of years and has a good reputation. Also, check to see if the service is regulated by a government body.

5. Store your crypto assets securely

Once you’ve bought your crypto assets, it’s important to store them securely. Many people choose to store their coins on a platform they use for exchange. However, this is not always the most secure option as exchanges have been known to be hacked in the past. If you want to store your assets offline, you can use a hardware wallet. This is a physical device that stores your coins and keeps them offline.

6. Be prepared to lose everything

Investing in crypto assets is risky and there’s always the possibility that you could lose everything you invested. Therefore you should be prepared for this possibility. If you’re not comfortable with the risk, then you shouldn’t invest. Remember, you should only invest an amount that you can afford to lose.

7. Monitor your investments

Once you’ve made your purchase, it’s critical to keep an eye on it. This means keeping an eye on the value of your investment and the performance of the platform or exchange you’re using. This will help you to spot any potential problems early on and take action to protect your investment.

8. Limit your exposure to risk

There’s no denying that investing in crypto assets comes with a certain amount of risk. However, there are steps you can take to limit it. The major steps that can help to protect yourself from potential losses:

  • Doing your research;
  • Investing only what you can afford to lose;
  • Diversifying your investments.

The crypto world is very tempting, but you must always stay cautious when investing in any volatile asset. This way your experience would be much more enjoyable.

This post contains affiliate links. Affiliate disclosure: As an Amazon Associate, we may earn commissions from qualifying purchases from Amazon.com and other Amazon websites.

Written by Ellie

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