Things to Keep in Mind before You Start Trading in Cryptocurrencies
I know that the cryptocurrency industry is flying high and has come out as one of the most profiting and benefiting trading assets in the online trading industry, but there are always risks and catches that one needs to be cautious about. When we look at the cryptocurrency industry, its reputation, and market valuation, we perceive it as a city full of lights at night in the middle of a desert.
However, it is always wise to not get carried away and end up experiencing a loss while trusting something too much. As the industry grows bigger and more profitable, more people want to get into the crypto-trading industry. But, it is always recommended that one must be extra careful and vigilant when setting foot into the cryptocurrency industry for trading.
Crypto-Industry versus Online Industry
Almost everyone in the entire internet industry knows it the online sector is full of risks because everything being dealt through internet is virtual and remote. Therefore, one does not know who they are dealing with or its very nature makes it more complex than dealing with someone face-to-face. Even then, the internet sector mainly centralized, which means that if a person makes an online purchase, the product is delivered physically, and the transaction the person makes is either via cash or bank account, involving a central body.
On the other hand, majority of the cryptocurrency industry is decentralized finance. This means that there is no central body or a physical entity governing this industry. More than 95% of the cryptocurrency industry is decentralized and is being operated by crypto-users spread all over the world. Therefore, it is extremely important to keep the following in mind when going in for cryptocurrency trading:
Study Cryptocurrencies before Thinking about Trading in Them
It is true that the cryptocurrency industry is full of surprises, opportunities and many people who have gotten into it, have made significant profits from it. But it does not mean that you would have the same experience in cryptocurrency trading. The industry currently has more than 106 million active users dealing with cryptocurrencies in different ways but it all comes down to trading with cryptocurrencies.
There are possibilities that you are not meant for cryptocurrencies or they are not meant for you. Maybe you do not have the patience of dealing with vast amount of data or be able to handle the volatility of the cryptocurrencies. Or, it may turn out to be more complex than you may have perceived them to be in the first place. This is the reason why you must learn about cryptocurrencies before you set foot into this sector. The industry is full of pressure and if you think you can handle it, then you can go ahead and take the first step.
Find a Brokerage that is Legit
It is a fact that wherever there are opportunities, the scammers and fraudsters also show up to avail them as well. If you think that the best the fraudsters or scammers would be able to do in the crypto-verse is to send you some phishing or bogus email, then you are mistaken. Similar to the complexity of crypto-trading are the scammers that have gone to great lengths in order to lure people and steal their money.
There are many Bitcoin exchange platforms in the crypto-verse and not all of them are legit. Therefore, the first thing you need to do is to ensure that they are legit. In order to confirm a brokerage’s authenticity, you can go ahead and acquire guidance on the following.
The first thing you can do is go online and ask the crypto-community for their reviews and feedback on a particular brokerage. You can also go through the services/benefits that the brokerage offers and if the provider is making promises that are too good to be true then that is a hint it is not a legit brokerage. If a brokerage claims that your investments will have 90% or 100% profits without any losses, then that brokerage is fake. The fraudsters do this to attract more and more people, and from the looks of it, they have been succeeding.
Make sure that the Brokerage is regulated
At present, there are many brokerages that are legit and providing crypto-trading services to people for a very long time. These brokerages may also be very popular among the cryptocurrency industry as well as other online trading sectors. However, you need to pay extra attention to see if the brokerage is regulated or not. If a brokerage is not regulated, it would not comply with major regulatory policies such as Anti-Money Laundering (AML) and Know-Your-Customer (KYC).
In the past couple of years, regulatory authorities from around the world have become very strict about the regulatory adherence of the crypto-firms. There are many countries that are taking legal actions as well as shutting down such brokerages who do not comply with these regulations. Therefore, if you are dealing with such brokerage, there are always chances that it may get taken down by the regulators in minute and you end up losing your savings/money the second.