97% of People Lose Money With Cryptocurrencies Because They Are Doing Exactly These 5 Things
If you want to keep losing money keep doing what everyone else does
Send $300 right now. I need to take care of my daughter. She said on Telegram.
After you send the money, send also the screenshot of the transfer and your crypto wallet.
I replied to her, send a picture of you holding your passport. Only after that will I trust you and send the money. Video call me for 30 seconds to make sure it’s not a bot. She agreed. 2 minutes later, she blocked me on Telegram. I said thank you, God.
Check, don’t trust. This is one of the most ignored rules. The market forgives no one.
The FTX collapse was the best thing that happened in the crypto sector. These five pieces of advice that no one else follows will help you protect your own money. Or at least lose less money.
1 — They don’t know where their cryptocurrencies are located
Cheap currencies and fees are decisive criteria for most of us when choosing a crypto exchange.
As we can see from the FTX example, these selection criteria are now becoming a nightmare. If you are a smart investor, you should check where the legal headquarters of your brokerage company are located.
Deregulated tax havens, such as the Bahamas, where FTX was headquartered, tend to be avoided, while Europe should be the best option.
If you don’t want to rely on third parties, hardware wallets might be a good option for you.
2 — They are not using decentralized corporations
Centralized crypto exchanges carry the risk of a single point of failure.
Anyone who does not want to trust CEOs and security departments but rather the code or protocol can be well served with DeFi (decentralized finance) platforms.
You should keep an eye on decentralized protocols as well. The most obvious ones are decentralized exchanges (DEX). Since the currencies are not stored there, there is not much money risk.
3 — They don’t know who the losers and winners are
Most people are currently suffering from this crypto winter. Two things are the most important in this crypto winter phase. Which brokerage company has enough liquid funds? And who has a business model that will survive in the long run?
Regulation is the missing piece to make the crypto industry more attractive. So it makes sense not only to look at the economic climate but also to keep an eye on licenses, ESG (Environmental, social, and governance) criteria, and how crypto exchanges manage customer funds.
You should go for better solutions and separate the rotten eggs. If you don’t do this, you will have to deal with painful losses.
4 — They don’t monitor closely
BlockFi went bankrupt because it depended of FTX.
The Solana Foundation also had big losses because of FTX’s collapse.
The foundation behind the Solana blockchain would have to write off a total of $180 million. It managed deposits through FTX and also held FTX’s own FTT token, the price of which has fallen completely. Solana’s price has also fallen.
It makes sense to evaluate who is dependent on whom. The investment bank Morgan Stanley has already published a list of companies that did business with FTX.
5- They don’t ask the right questions
Only in a crisis do you know who is who. This means that you have to watch closely which pieces are moving. And ask questions like:
Is this crypto exchange safe? See the screenshot of money reserves on the exchanges.
Does this crypto company do business with a company that has had troubles in the past?
How many active users, or has transaction volume dropped compared to competitors or compared to the previous year?
These questions can help you make the right decisions. Its volatility and price history can distract you from making the right decisions.
Upshot
It is difficult to see up close who is who. The deciding factor is the future viability of crypto projects.
Excessive marketing budgets and reward programs, as in Crypto dot com, are factors that will always push prices to the heights of that crypto company.
Stay tuned.
The market forgives no one
As always, invest only what you are willing to lose.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.