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How Safe Is Cryptocurrency Trading - Know Your Risks - Binaryx

How Safe Is Cryptocurrency Trading

Almost all the most notable cryptocurrencies started to operate in the last 10 years. Still, all the fuss around digital coins was made over the past few years. And now, the crypto trading is the mainstream thing. A few years ago, the crypto madness reached its height. The price of Bitcoin, which is the most popular crypto-asset, grew to $20,000 in the middle of December 2017. Later, prices started to fall rapidly, but media interest in cryptocurrencies continued to skyrocket.

The apparent volatility of digital coins, even over such a short period, surely begged some questions. Mainly, traders want to know about their security. In the meantime, large-scale hacks occurred, as well as rumors about deceitful activities. It’s only voiced concerns about their safety by extension. If you’re interested in crypto trading, it can be tough to differentiate between media scoop and useful facts on the state of the market.

Investing in crypto-assets requires knowledge of the market. Therefore, it needs to explain how safe they are.  

Are Cryptocurrencies a Safe Choice to Invest?

In a word, there’s no kind of a thing called “safe investment.” Some tools are more dependable than others, but most of them have risk elements. Moreover, there’s high volatility with which crypto-assets have shifted over the last year. It can be evidence of higher downside risk. Still, it seems to be such a profitable investment for dozens of thousands of people. Buying and selling crypto coins doesn’t have to be a risky venture if the trader knows the marketplace and is liable for investing.  

All interested in trading can choose between hundreds of cryptocurrencies. However, not all of them are equal. Before you decide to buy some digital coins, it would be best to research who created it. First, this asset needs to be present on controlled exchange platforms, performing thorough screening processes, and be accepted by recognizable brands. Seems to be tough? Perhaps, but it’s critical when it comes to investing your hard-earned money and making some profit.

Discover Binaryx Exchange Platform

Binaryx has all the necessary licenses and provides safety trading experience for both technical and non-technical users. Moreover, the company stores deposits on cold wallets located around the globe. Partners such as IO guards and others are closely working with Binaryx to provide cybersecurity assessment reports and screening of employees. Use this link to get started working with Binaryx right away.

Will My Crypto-Assets Get Stolen? 

Crypto coins are compared with some notable risks during the investing process. First, they are fragile against hackers, which is such a contentious point. Digital assets have become increasingly popular, and the audience is much broader than in the last 4-5 years. But, they became an easy target of cyber-attack; there were some high-impact attacks over recent years. Owner of crypto coins have lost their assets and can’t get them back.

There are some general features between these digital invasions. One of them is the targets were public exchanges or crypto wallets. About 30% of cyber-attacks happened when hackers compromised transactions, and the wallets associated with them drained. Many traders lost their crypto coins last year during these attacks. Still, there’s a simple solution that makes these losses avoidable. The best way to keep crypto coins secure is to collect it on a ‘cold-storage device.’ It may sound intricate, but it mainly means that it’s offline storage.

A standard cold storage method is to use a paper wallet or an external hard drive. You only store the address and the key required to access the digital assets. Ideally, crypto coins and the related data needed to reach them should only be connected to the internet during trading. So, don’t forget to disconnect your cold storage afterward. It’s the best way to ensure that your assets are not at risk of being hacked.

Are Cryptos Being Used by Offenders?

Digital coins are more questionable on a much broader scale. The reason is their alleged facilitation of criminal activity, such as money laundering. Allegations have been made that cryptocurrencies are affording criminals the anonymity they don’t have using standard fiat currencies and bank accounts. The converse is true. The technology that underpins cryptocurrencies, blockchain, ensures that all actions are traceable.

Every time any amount of value is transferred, a record of the transaction is added to the blockchain. It’s virtually impossible to edit or manipulate these data. Money laundering typically uses complex trails of money movements to confuse the money’s point of origin. Hence, improper payment eventually turns it into a crucial legitimate asset. It’s not possible with cryptocurrency, because the trail of money is recorded and, therefore, always traceable. 

How Authorities Reacted?

Until recently, the fact that crypto-assets have been mostly unregulated in an official capacity has led to wariness from potential investors. Several tier-one banks and funds are becoming increasingly inclusive of cryptocurrencies by choosing to recognize them as legitimate assets. 

Until then, various financial institutions and cryptocurrencies themselves have been using the FCA policy as a guide. Further, they self-regulated themselves to the same standard. It involves assessing customers to ensure that they are not planning to use cryptocurrencies to launder money. Moreover, they wouldn’t help any other type of nefarious activity by reviewing each account’s ultimate beneficial owner.

This self-regulation was recently legitimized by the European Commission, who earlier this year introduced the EU’s 5th Money Laundering Directive. It becomes embedded that all digital assets and their particular investors be subject to regulation in terms of money laundering. It’s a critical step forward towards full and extensive crypto management. It’ll improve the security and legitimacy of crypto coins further still.

Cryptocurrencies are not inherently unsafe. The technology that underpins them is consistently described as the most secure technology in existence. Self-regulation by financial institutions and owners of the crypto coins themselves was combined with recent policy developments led by the EU. Further, it was enhanced their legitimacy as an international means of transferring value. On an individual level, cryptocurrencies can be an excellent way to invest as long as the buyer is smart about the decisions they make and does their due diligence first.

The enthusiasm from the cryptocurrency community and incremental displays of support from leading financial institutions suggests that cryptocurrencies are here to stay. So, misconceptions surrounding their safety must be cleared up.

How to Trade Cryptocurrency Safely

Once you have decided to engage in trading crypto, you have to exercise extreme caution. Moreover, you need to make wise decisions. It can prevent you from being scammed and ultimately preserve your digital assets. Here are four essential things investors must consider as you make your first cryptocurrency purchase and discuss trading.

Research and Explore the Cryptocurrency Trading World

Since it’s your first time, do all your best to learn crypto trading. Don’t be afraid to ask even the smallest questions. If you don’t know how crypto trading works or what crypto trading tools you can use, it’s not a problem.

Ask about anything that comes up in your mind. The process is quite similar to any business venture or financial transaction. You need to have complete knowledge of what you are getting into before making any investment or payment.

Digital currency investors who buy and sell Bitcoin and other altcoins are advised to do the necessary research before proceeding with their actions. Stay informed regarding crypto exchange reviews, check cryptocurrency news, and examine crypto articles. Moreover, specific crypto forums will help you to gain more knowledge about the crypto trading industry.

Invest the Amount that You are Willing to Lose and Spread Your Assets

Never enter a trade with everything that you have. You need to make a careful evaluation of your assets to know how much you can risk. You can still go about your normal activities, even in the face of the worst scenario.

Cryptocurrency trading can be extremely volatile. Crypto markets experience more fluctuations than stock markets. An altcoin that went on a bullish trend for months can suddenly drop and surprise you. You don’t need to invest only the amount that you can afford to lose. It’s also wise to spread your assets into different good-performing digital currencies.

Beware of Phishing Scams and Fake Versions Exchange Websites

Some of the cryptocurrency scams that happened are because of neglect in verifying the authenticity of the website people visit. Hackers widely use phishing scams. The primary purpose is to gain information useful for accessing the users’ crypto exchange wallets. 

Phishing scam is done by creating a fake and identical version of the cryptocurrency exchange then emailing the link of this site to the target. The mail usually includes a persuasive message. It lets people quickly click on the link that directs them to the fake login page. It is, therefore, essential that you know the official URL of your crypto exchange platform. Never follow doubtful links; it’s unfair.

Keep Your Devices Safe

Make sure that your devices such as desktops, laptops, and smartphones used for cryptocurrency trading activities are safe. Be careful when installing software, downloading attachments, or clicking on random links on the websites you visit. Make sure to have updated antivirus and enable your computer’s firewall. When you trade with outdated antiviral software, it will be hazardous. When it comes to crypto trading, security is paramount.

Intensify Your Login Information and Your Wallet Security

It should be common knowledge to keep your login information. First of all, you need to keep your storage safe as intense as possible. Use complicated passwords on your exchange accounts. There can be a combination of lowercase and capital letters, symbols, and numbers. If you think that a new complicated password seems difficult for you, then start to use a password generator. It may help you create a new code.

Moreover, there are a few words about password storage. It would be best if you’ll make it offline. Write them on a piece of paper and storing them in a safe place. Preferably enable two-factor authentication (2FA) to your crypto exchange accounts and even your email accounts that are connected to your exchange. It adds another layer of security to store your data securely. The most common methods for 2FA are passcodes sent to your email or by SMS. One cannot be too careful.

Have a Crypto Trading Strategy

The CoinRedact website asserts that you can quickly lose in trading activities without the right strategy. Pursuing this venture without a crypto trading strategy is like going on a battle empty-handed. You are prone to making wrong trading decisions. 

Still, it can also lure you into performing unsafe crypto trading practices such as joining pump and dump activities. A group of influencers characterizes these practices. They try to generate hype to encourage traders to buy a particular coin at the same time. On the surface, joining may seem tempting because of the high returns foreseen. Still, in reality, this illegal activity usually benefits only a small group of traders. Don’t fall for it.

It is essential to familiarize yourself with the crypto trading strategies used by some of the most successful crypto traders. One of the proven strategies is the QFL method or the Base Strategy. This method works by recognizing bases to determine the right time to buy and sell coins.

Once you have set your strategy, look for the most helpful crypto trading tools. It will help you to ease the usually stressful and time-consuming activity. The specific software mostly features a base scanning application through the Crypto Base Scanner. This tool is founded on the QFL strategy and works by automating the crypto market analysis. It uses unique algorithms to identify trading bases. Moreover, this digital solution helps users to determine their buying and selling actions depending on each crypto market’s support levels.

Additional Safety Tips

Also, you need to be careful about public exchanges. As history shows, no platform is hackproof. Therefore, issues always occur when you expect them the least. Consequently, it’s better to take matters into your hands and fix yourself a private digital wallet. The cold storage would be the most reliable choice to store your digital assets. 

Cryptocurrency trading can be a lucrative venture that can probably give you profits. However, it can be done successfully with the right strategy and careful decision-making. Follow the competent crypto trading tips; they will help protect yourself from the volatile market and other external factors. The safer is the trading environment, the more chances to get the profit.

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