The Risks Associated with Crypto

The Risks Associated with Crypto

Crypto currencies have become one of the most desired investments in recent years. Every crypto seems to be going to the moon, but the reality is fairly different. Although some investors have been able to book stellar crypto profits, there are also many investors that are struggling with the risks associated with crypto.

Due to being an unknown space, crypto has attracted a lot of individuals that are looking to scam investors and take away their money. Therefore, it is crucial to understand exactly what risks are associated with crypto.

In order to protect your investments you need to choose the right cryptocurrencies to invest in and avoid being swindled by rug pulls.

How to Choose Cryptocurrencies

Choosing cryptocurrencies depends not only on the name of the token, and how it trades but also the team behind each crypto. It is important to understand that some cryptocurrencies are only developed with the goal of defrauding investors. Therefore you need to be able to choose cryptos based on their utility. This will directly influence how the price of the cryptocurrency will stay stable over the long-term.

Avoid Cryptos Promoted on Social Media

It has become increasingly common for some cryptocurrencies to be heavily promoted on social media. These tokens are usually used by developers to defraud investors. In order to avoid this entirely, make sure you do not get your crypto picks from social media accounts, that may be receiving money to promote a useless coin that will eventually be rug pulled.

Some of these individuals might even promote these cryptocurrencies claiming if you do not get in early you will be an NGMI (not going to make it). Ignore all the nonsense and do not let this affect the way you conduct your investments.

Investing Should be a Personal Decision

One of the most important aspects of every investment is to do your own due diligence. If a particular investment does not go according to what you have expected you have nobody to blame but yourself. This is crucial that investors understand that when it comes to investing you only have to answer to yourself.

Avoid Taking Investment Advice on Social Media

This is another incredibly important point. Make sure you do not take any investment advice from nobody but a certified financial planner. An anonymous account on social media, or even well known promoters of cryptocurrencies sometimes have a financial interest in promoting a certain investment. Therefore the conflict of interest does not allow them to give investors the best advice. Do not fall for anyone promoting investment advice or crypto on social media.

John Norwood
John Norwood is best known as a technology journalist, currently at Ziddu where he focuses on tech startups, companies, and products.