There are many pitfalls one can easily get when using, storing, investing or trading cryptocurrencies. While some mistakes can cost you, most common mistakes can be easily avoided. Here are the top seven deadly mistakes that crypto owners should avoid.
Common mistakes for all crypto owners
The video, titled “7 Crypto Mistakes You Should Avoid,” highlights seven of the most common mistakes that crypto owners can make with explanations of how they can avoid them. Some are aimed at all crypto owners and users while others are more targeted towards investors and traders.
One of the top mistakes in the video is not backing up your wallet. “If you lose access to your private key due to loss, theft or damage, you will have no access to your money and be lost forever”, according to the video. A device that holds your wallet can be damaged, lost, stolen and backed up is the only way to get your money back.
The video also explains the possible risks of mixing different forks and how to prevent them. For example, when BCH forked from BTC, some users claimed to have lost their BCH by sending their funds to a BTC address.
Some common mistakes are related to how your money is stored. While it’s easy and convenient to store them in hot wallets, there have been numerous security breaches wiping out all the coins held in them. Similarly, keeping your money at crypto exchanges is also risky, as they are often the target of hackers and many of them do not have adequate security measures in place. When they get hacked, you may not get your money back. Take the creditors of Mt. Gox, for example, is still struggling to get their money back to this day.
Other recent exchange hacking examples include Binance that was hacked in May and lost around 7,000 BTC; Bitpoint Japan lost around $ 32 million in crypto when it was hacked in July; Coincheck lost about $ 534 million XEM when hacked last January; and Korea’s Bithumb exchange has been hacked several times over the years.
Some mistakes when trading cryptocurrencies
Videos also have some common mistakes when investing in or trading cryptocurrencies. Both are more popular at market time and investing than you are likely to lose. As prices go up, it will be tempting to do both. Similarly, when the market is down, some traders tend to sell and cut loss.
“Of course, we often hear success stories in the media, however, many of the losses that participants were looking for in the market were caught up in disaster,” according to the expert. Invictus Capital senior investment analyst. Here are some examples of how crypto traders are handling the bear market, and one Chinese trader told his story about how he lost 9,000 BTC.