How to Avoid Crypto Scams
Last week we looked at reasons why you should be thinking about crypto, specifically bitcoin, in your portfolio. It’s an asset that you should be familiar with by now and may even already have in your portfolio.
If not, why not?
For one, there won’t be more than 21 million that ever exist in entirety. And millions of those will never be accessible.
So in reality there’s really only around maybe 17 or 18 million the world will ever be able to get their hands on.
We also know there are existing holders that hold multiple bitcoin already.
So when we talk about constricting supply, that’s why. Your chances of being a ‘wholecoiner’ (someone who owns a whole bitcoin) reduces every day you hold out.
Also, bitcoin is money, just maybe not the money you’re used to. I should know, I’ve used it to buy goods and services.
The great thing about bitcoin as money is it doesn’t care who or where you are. I can use bitcoin anywhere in the world and it’s always bitcoin. One universal form of money.
The other thing is that typically bitcoin is a zero-correlated asset. Meaning in times of crisis, extreme uncertainty, bitcoin acts as a great hedge.
In fact, it’s like gold in that sense. There’s no reason why gold and bitcoin can’t harmoniously live in the same portfolio and serve a very similar purpose.
These are just a few great reasons why bitcoin should form a part of every investor’s portfolio. Of course how many you accumulate is up to you.
The kinds of scams to avoid
One thing you’ll notice I haven’t mentioned yet is ‘price’.
I’m not going to beat around the bush…one whole bitcoin is bloody expensive, at around $18,000 for just one. And for most people, that’s out of reach.
Thankfully bitcoin doesn’t just come in whole bitcoin. One bitcoin is actually equal to 100,000,000 satoshi (sats). That means you can get your hands on 0.00000001 bitcoin as the smallest possible denomination.
At current ‘prices’ that would be the equivalent of about 1.8 hundredths of a cent. Or another way to look at it, $1 equals around 0.00005555 bitcoin or 5,555 sats.
When you start to look at bitcoin as money in that way then there’s plenty of scope for everyone in the world to get some bitcoin. It’s just the likely outcome is it will be denominated in sats, not whole bitcoin.
And that’s why the scarcity play of whole bitcoin is important.
Our view is that owning a whole bitcoin in the future will be like owning a 1kg bar of gold. Not that many people will ever get near that.
But for all the virtue of bitcoin and for all the reasons as to why you should get some, there’s still a few barriers stopping people from doing it. And one of those is fear of the unknown.
What doesn’t help is the piece of crap scammers out there trying to rip people off with multi-level marketing schemes (pyramid schemes) and outright Ponzi schemes.
I say this because I was recently sent a link by a family member promoting this thing called ‘Bitcoin Aussie System’. She wanted to know if it was real or not.
Well I broke it to her gently that the chances were this ‘system’ was some kind of convoluted scam to sell some kind of software that likely didn’t work.
I also explained the only way for her to ‘earn’ bitcoin was to just buy it.
She didn’t take the system any further. But she did buy some bitcoin.
I also had a friend’s Mum contact me to ask about a bitcoin trading network she’d already joined up to. Why she didn’t ask beforehand, I’ll never know.
She asked because alarm bells started going off when, two weeks after joining, she was getting daily phone calls asking her to put more money into her account. And not just little amounts, £5,000 more.
She’d started with a £300 starting amount. And according to her online log in, it was now worth £600. And these traders working her account for her were making all this fast money.
Except when I dove a little deeper into her account the prices and dates of trades didn’t match up to prices of bitcoin. Not only that, they weren’t just trading bitcoin. And on top of that they were using leverage without her knowledge.
And then as she said, they were quite aggressive about her joining the ‘VIP level’ and putting in another £5,000 to her account.
Now the likely outcome here is that if she had put in £5,000 that would have been used to inflate the account values of other suckers. And they would then get hit up for larger amounts to inflate the figures of other accounts.
You see how this kind of thing works. For what it’s worth I told her to rip out every cent from these scammers. Which she did.
How do you avoid scams like this with bitcoin and crypto? It’s very easy. Anyone that says they will do it for you and make you money without you having to do anything is full of…horse manure.
Avoid them at all cost.
There are ways to use the mathematics behind crypto to earn more crypto without having to do anything other than just hold specific crypto. But that is for already experienced crypto investors, and certainly not for the novice.
However, if you want to easily get into the crypto space and it’s your first time, and you want to avoid the scammer, there’s only one way in my mind to do it.
Set up an account and just buy it for yourself.
But that’s easier said than done, right?
Well, it doesn’t have to be. And tomorrow in Money Morning I’m going to tell you step by step how you can get bitcoin
all for yourself.
Don’t miss it!
Editor, Money Morning
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