How to Stay Safe When Investing Your Money in Crypto
One of the most important things to pay attention to when you start investing in cryptocurrencies is staying safe and keeping your investments secure. Crypto is still not regulated in most parts of the world, and that means that the risk of scams and being unable to get your money back if you lose it is greater than in other types of investment, and those risks shouldn’t be overlooked.
Nonetheless, if you know how to protect yourself and own your own financial decisions and investments, you can make a decent amount of money for yourself in the long term. We’re going to talk about the basic principles of keeping your investments safe in crypto and not losing out big. So read on now and learn more about that.
Understand That Scams Are Common
First of all, you need to simply accept the fact that there are lots of scams in the world of crypto. Wherever there’s money and the opportunity to make a lot of it, you will, unfortunately, run into a lot of scammers and bad actors as well. It’s no different with crypto, so you need to be alert and on the lookout for scams. If something looks like a scam or seems too good to be true, you need to accept that it probably is. Being streetwise and not allowing yourself to be too naive will benefit you in the long run.
Random People Contacting You Are Probably Trying to Scam You
If you receive a DM from someone on Twitter, Instagram, or Discord, they might seem like they’re trying to be helpful or even trying to offer you something, but it’s important not to be suckered in. There are always people out there trying to scam you, and social media is one of the most common places they’ll try to do it. They’ll talk to you, maybe even build up a friendship. That’s how they get your trust, making it much easier for them to scam you later.
Your Seed Phrase Needs to be Kept Safe and Private
Your crypto wallets will be secured with private keys and/or a long seed phrase. It’s important that you don’t allow anyone else to see or have access to these because as soon as they do, they can instantly gain access to your wallet and all of the assets stored in it. That’s why you should never share your screen with anyone or type your seed phrase or private keys anywhere on the internet. Keep it stored on paper in a secure physical location rather than digitally too.
Be Ready for All Outcomes
It’s important to be ready for all potential outcomes when you’re investing your money in crypto. There are all kinds of things that can happen. Against the odds, the price might rise far more than you expect it to. On the other hand, the markets can crash pretty hard without too much warning too. You need to be prepared for all of these things and not assume that you know where things are heading next because it’s usually impossible to say.
Use Both Cold and Hot Wallets
When you’re moving your crypto around between different wallets and storing your crypto, you need to know the differences between cold and hot wallets and why it’s important to use both. First of all, you need to know that cold wallets are for storage and you can use devices such as Ledgers and other hardware wallets to make those cold wallets extra secure. Hot wallets are the ones that are for daily use and that you can connect to protocols and minting websites. These are not where you’ll store the bulk of your money.
Setup Multi-Factor Authentication on Exchanges
It’s definitely a good idea to have a multi-factor authentication setup on your accounts that you have with centralized exchange platforms. That means that you will use an authenticator such as Google Authenticator to make sure that you and only you can take money out of your exchange balances on those platforms. It’s a way of making sure that even if your login details are compromised, people won’t be able to take your money.
Don’t Click Random Links
One of the most important rules to remember in crypto or when using the internet, in general, is that you shouldn’t click random links. If you use Metamask to store your crypto, for example, you might click a phishing link and then connect your Metamask wallet to that website. When that happens, you’re only a small step away from losing everything in that wallet. So make sure that you stay away from random links and certainly don’t connect your wallets to sites that you don’t know and trust.
Research the Exchanges You Use
When you’re deciding which exchange you should use to buy and sell cryptocurrency, you should always take the time to survey the options and do some research into them before deciding. Some are better than others in terms of reputation, security, the length of time they’ve been around, and the fees they charge you to make exchanges and trades on the platform. None of that stuff should be ignored.
Don’t Go All In
Finally, you should remember that it’s never a good idea to go all in on a risky investment, and most crypto investments carry a pretty big risk. It’s much better to be slow and gradual with the investments you make. That way, you can take opportunities as they arise and you won’t have regrets later if the prices go down after you go all in.
There are lots of risks and dangers out there when your’e investing your money in crypto. There are lots of things that can go wrong and many problems that can arise if you’re not taking care to protect your money. So be sure to keep in mind each of the tips and ideas above if you want to avoid losing out big.
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