Even experienced merchants often suffer huge losses in the area of digital money. But big mistakes can be avoided and protected from fraudsters at the same time.
There are many ways to earn money in the field of cryptographic currency, but losing capital is much easier. You can lose your savings without starting a trade - due to fraudsters or hackers. We analyze the main ways to go bankrupt in the digital money market.
Participate in a free distribution of Bitcoins
YouTube and Twitter ads often appear for celebrity giveaways. Fraudsters use the image of billionaire Elon Musk more often than others. Criminals offer to send them cryptographic currency in the name of the boss of Tesla and SpaceX in exchange for twice as much. This is indeed a mistake.
You can't believe such advertisements, nobody is giving out free cryptographic currency this way, and even more, they won't ask to send a few coins first. Due to the popularity of this type of scheme, some industry representatives in the block chain have even changed their nicknames in social networks. For example, the creator of Ethereum Vitalik Buterin had a Twitter account for a long time "ETH does not give away", which means "I do not give ether".
The highlight of the scammer's actions was the Twitter hack in July . Reports from Elon Musk, Bill Gates, Barack Obama, Apple and others were compromised. Billionaires, politicians, representatives of the cryptographic industry and celebrities published articles about the free distribution of digital money. Thanks to this, the criminals were able to collect about $100,000 from Bitcoin within two hours.
Keep the crypto currency on the stock exchange
Even the largest crypto currency exchanges are not immune to hacks or insolvency. Funds can be stolen by hackers from the website, or the company can suffer losses due to a decline in merchant activity. If this becomes known, you will not be able to return your digital coins. Therefore, it is always necessary to transfer exactly the amount needed for trading to the exchange and the surplus should be deducted into a personal, preferably cold wallet.
You can also lose money by sending it to a stock exchange run by fraudsters. If you transfer crypto currency to such a platform, you will not be able to withdraw it. Technical support may respond that there are problems with the platform, or make other arguments to prevent withdrawal of coins. You should work with popular platforms that have been in existence for more than a year. It is better to work with an unknown platform with a small symbolic amount to check if it is possible to withdraw.
Become a member of the pyramid system
For two years in a row, the users of crypto-currencies mainly lose money in financial pyramids. In 2020, the Wotoken program, which attracted more than $1 billion from more than 715,000 investors, led the way. In the general list of cryptopyramids, the first line is occupied by OneCoin. According to various estimates, fraudsters have stolen between 4 and 15 billion US dollars.
All these schemes are similar. The user is offered to make money by attracting other investors, and is promised high profits if he deposits money. All profits made by early investors are made by late investments. Usually, the organizers take most of the money, the rest of the participants are left with nothing.
Buy when it rises and sell when it falls
Inexperienced traders often sell assets when prices fall and buy when prices rise. This strategy leads to negative results.
To avoid such mistakes, experienced traders and investors develop their own trading strategy. First, they divide the capital into parts, which allows them to carry out several transactions in parallel. Secondly, they calculate in advance how they will act in a certain situation.
The most dangerous thing in trading is the FOMO effect (fear of lost profits). It forces not only beginners, but also experienced traders to buy an asset whose price has risen, out of regret that they did not buy it earlier. In most cases this leads to losses.
Act with leverage
Margin trading allows you to borrow money on the stock exchange. In return, the user's security means are used. If he loses, she keeps a deposit for herself. Leverage is very popular as it allows you to increase your working capital several times, sometimes hundreds of times. However, with this option there is a high risk of losing all your funds.
The crypto currency market moves unpredictably, and even experienced traders often suffer large losses. For example, between March 12 and 13, when the Bitcoin rate fell from $8100 to $3800, traders lost $5.8 billion in margin trading. It is important to work very carefully with this tool and not to use it without sufficient knowledge and training.