You can lose funds investing in bitcoin | Dailytrust

You can lose funds investing in bitcoin

Cryptocurrencies like Bitcoin are becoming decentralized currencies without ties to the government or institutional regulations. They enable investors to diversify and secure their portfolios against inflationary risks, such as market manipulations. Bitcoin has demonstrated rapid and enormous price gains in recent years, offering investors several profit-making opportunities. However, virtual investments also bear some risks. The following are some of the main ways you can lose funds investing in Bitcoin and how to avoid them:

Cyber theft

Bitcoin is a digital currency, only accessible over the internet. That is one of the main reasons cryptocurrencies are usually open to cyberattacks. Hackers are constantly looking for vulnerabilities on the Bitcoin network and its users to exploit. Hacking is a serious threat to investors since there is usually no way to retrieve the funds once they are stolen or lost.

Several reports indicate crypto traders increasingly lose their investments to exchanges and mining losses. While leading crypto exchange platforms have beefed up security, most of them remain vulnerable to cyberattacks. Nevertheless, choosing a more secure Bitcoin wallet and observing safety precautions could help you prevent cyber theft.

Market fluctuations 

Bitcoin and other cryptocurrencies are highly volatile, with enormous and swift price swings. For instance, one Bitcoin was worth $6,461 in November 2018. Those who purchased Bitcoin in December 2017 paid $20,000. A few days later, traders could not sell their Bitcoin for more than $14,626. That indicates the crypto market’s constant back and forth ripples and unpredictability.

Most of the time, it is difficult to tell whether your investment will gain any substantial returns. However, keeping a vigilant eye on the market could make a huge difference. Leading crypto exchanges such as bitcoin-loophole.live now provide up-to-date market analysis to help traders keep track of Bitcoin’s price movements and other relevant statistics. Besides, investing small amounts of Bitcoin could also enable you to avoid huge losses from market fluctuations.

Fraud 

Besides hacking, the crypto market is also subject to several cases of fraud. Buyers and sellers are constantly seeking to trade Bitcoin and other cryptocurrencies online. However, their increasing popularity has also attracted fake crypto exchanges and criminal organizations looking to make quick bucks from unsuspecting investors.

The US Consumer Finance Protection Bureau and the Securities and Exchange Commission have cautioned investors against fraudulent websites. Most of them trick traders into sending Bitcoin to their addresses for huge profits. Fake exchange platforms offer seemingly lucrative deals, promising considerable rewards but are mere scams to con investors.

Traders should carefully choose reliable and trusted crypto exchange platforms to buy and sell Bitcoin. Many crypto trading sites today provide listings of fraudulent websites and organizations that investors should avoid. Checking them could be a great way to avoid losing your investments to fraudsters.

Password loss 

Every Bitcoin user has a unique private key, serving as the password for accessing their wallets and authenticating transactions. That means anyone with access to your private key has the authority to transact through your wallet including, withdrawing funds. Whether you store the private key offline or online, there is no way to retrieve the funds once it is lost. Nevertheless, holding your private key in a cold wallet or offline is the best way to secure your investments from such risks. It would also be ideal for storing your private keys in different locations for backup, ensuring you can still access the funds even if one gets lost.

Crypto assets are subject to several threats, including cyber theft, fraud, market fluctuations, and password loss. However, that does not make Bitcoin and other cryptocurrency investments less attractive. Most of those risks are avoidable, with incredible opportunities for making substantial returns on your investments.

Dear Reader,
Every day, we work hard to provide readers such as you with the most accurate, up-to-date, and comprehensive information. Quality journalism costs money. Today, we're asking that you support us to do more. Your support means that Daily Trust can keep offering journalism to everyone in the world. Sign up for as little as N1,000 to become a member. Learn more about our membership here

Bank transfers can be made to:
Zenith Bank
1017257739
Media Trust Ltd


Please send details of your bank transfer to the email or Whatsapp number below so that we can contact you.

If you have any questions, please let us know.

Inquiries:
Email: membership@dailytrust.com
Whatsapp: +234 806 990 3410