With inflation on the rise, you might be looking for ways to pay your rent and other bills. If you’re considering boosting your savings with crypto, be careful. According to the FTC, more than 46,000 individuals claimed to have lost over $1 billion in cryptocurrency scams since the start of 2021. The median reported loss is $2,600 per individual.
Cryptocurrency is not regulated by any government agency and investments are not protected like a savings or checking account. With so much money at stake, it's vital to spot the signs of a crypto scam.
Here are 10 red flags that your investment may be a scam.
9 Things You Must Do Before The Next Recession
A common sign of a crypto scam is unrealistic claims. If a website selling crypto claims to do something that seems too good to be true, it probably is. Be wary of any offer that makes grandiose promises without being able to back them up.
For example, if an advertisement claims you may make a 10 times return on your investment in a short period, that should be a major red flag. Be skeptical of any project that claims to offer guaranteed returns, regardless of the investment amount.
Another example is a project that claims to have developed a "new and improved" blockchain technology much better than anything else. Unless the team can provide solid evidence to support their claims, you should be wary of investing.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
If you want to invest in cryptocurrency, check to see if it's on major exchanges, such as Coinbase or Gemini. If it's not, you should reconsider investing.
Cryptocurrencies that aren't on major exchanges are often scams. Listing on an exchange requires paperwork for registration, which scammers are usually unwilling to go through.
If an initial coin offering (ICO) paper is short on details, it may be good to avoid putting in your money. A well-crafted whitepaper should provide clear and concise information about the project, team, and crypto. If crucial information is missing, it’s likely the ICO is not a good investment.
Do your due diligence and research an ICO thoroughly before investing. You want to be sure you're getting into a project with a solid foundation.
An ICO without a whitepaper is often a sign that the project is not well thought-out, that the team is inexperienced, or that it is a scam. Before investing in an ICO, request and review the whitepaper. If the group cannot provide one, walk away.
If an ICO shows signs of pump-and-dump behavior, you may want to look elsewhere. Pump-and-dump schemes artificially inflate the price of crypto to raise its price. When the price increases and attracts new investors, the original owners sell out and leave new investors holding crypto with a much lower value.
6 Clever Ways To Crush Your Debt Today
In the stock market, pump-and-dump schemes are considered fraud and are illegal.
Do your research to understand who is promoting a crypto and track the price to determine if it’s a scam.
Sometimes, celebrity endorsements may be misleading. For example, in 2017, Floyd Mayweather and DJ Khaled were both paid to promote a crypto scam called Centra Tech, but they did not disclose these payments in their social media promotions.
Suppose you're considering investing in cryptocurrency that a celebrity has endorsed. Here’s what to look for:
Check to see if the celebrity has a history of endorsing scams or other questionable projects.
Research the project itself to see if there are any red flags.
Consult with an investment advisor to get a second opinion.
Celebrity endorsements may be a helpful way to learn about new investment opportunities, but they should not be the only factor you consider when making an investment decision.
When considering investing in a cryptocurrency project, it is crucial to assess the strength and activity of the community supporting it. A small and inactive community could show a lack of interest or belief in the project, leading to its eventual failure.
Conversely, a large and active community shows a high level of engagement. It suggests that the project has a better chance of succeeding. Therefore, considering the size and activity of a project's community is an integral part of due diligence.
A project's website should tell you about the team behind it. If there is minimal to no information available, the project may not be reputable. A team unwilling to share information about themselves could be hiding something. Therefore, it is best to avoid investing in projects with minimal details on the founding team.
A disorganized or inexperienced team may indicate that they don’t know what they’re doing. You'll want to be sure that the people running the business are competent and have a track record of success.
To aid your research, look for online reviews and testimonials from other investors. You may also check out the team's social media accounts to see how they interact with the community. Are they unprofessional or don’t take the business seriously?
11 legit ways to make extra money
An open-source project is one that anyone may view, download, and change the code. This transparency is essential for ensuring that the project is trustworthy. In contrast, a closed-source project is one where the code is kept hidden from view.
This lack of transparency may make it difficult to know if the project is legitimate. Scams are unfortunately common in technology, and many scammers may try to hide their code to avoid detection.
As a result, you should be cautious when considering a closed-source project. If you're unsure whether to trust a project, err on the side of caution and choose an open-source alternative.
By being aware of some of these red flags, you may protect yourself from falling victim to a crypto scam. Always conduct your research and never invest more than you may afford to lose.
These are just some of the things to look out for when assessing a cryptocurrency investment. If something is too good to be true, it probably is, and there are more reliable ways to boost your bank account.
More from FinanceBuzz:
6 genius hacks Costco shoppers should know
9 things you must do before the next recession.
Can you retire early? Take this quiz and find out.
9 simple ways to make up to an extra $200/day
This article 10 Red Flags to Look for When Buying Cryptocurrency originally appeared on FinanceBuzz.
Millennials have given up on stocks. Is it time to follow suit?
Cathie Wood makes big bets on potential huge winners. But Ark Invest's top 10 holdings, including Tesla and Roku, have tumbled in 2022.
The billionaire entrepreneur fears that the economic downturn will become worse if this decision is made.
First, develop a plan (some might call it a budget), said Robert Gilliland, managing director and senior wealth adviser at Concenture Wealth Management. Take into consideration every single possible expense you anticipate after your husband dies, and account for inflation as well. You can break these expenses down into the short term, such as one to five years, the intermediate term, which would be the six- to 10-year span, and the long term, or beyond 10 years.
JPMorgan Chase says ongoing inflation and an outlook for sharply lower returns for investors means that retirees should toss the long-standing 4% rule. That's the rule that says retirees can safely draw down their savings by 4% per year without … Continue reading → The post JPMorgan Says You Can Safely Withdraw This Much From Your Retirement Accounts Yearly appeared first on SmartAsset Blog.
At first glance, Intel (NASDAQ: INTC) might seem like a reliable long-term investment. If you had invested $3,000 into Intel's rival Advanced Micro Devices instead, your investment would be worth roughly $78,000. A $3,000 investment in Taiwan Semiconductor Manufacturing (NYSE: TSM), Intel's top competitor in the foundry market, would also have blossomed into nearly $11,000.
Time flies. But it also crashes.
Elon Musk has praised his competitors but never hidden his competitive edge. And he just tweeted out that edge in a big way.
A class action lawsuit filed against former FTX CEO Sam Bankman-Fried and a host of paid celebrity promoters for the now-defunct crypto exchange has been dropped.
With some CDs and online savings accounts offering the best yields in a decade, now is the time to be strategic with your savings.
In 2022, Buffett has gone on the offensive, taking advantage of the market's recalibration.
Mohamed El-Erian is worried that crypto’s risk-taking behavior is just an example of what became the norm over the past decade.
Nio (NYSE: NIO) pleased investors with its forward projections when it reported third-quarter earnings a month ago. When Nio announced its quarterly results on Nov. 10, it told investors vehicle deliveries increased almost 30% year over year. Today, Li Auto (NASDAQ: LI) said it also expects to deliver up to 48,000 EVs in its fourth quarter.
Investors who bet on a decline in the electric vehicle maker's stock price in the short term have won the jackpot.
BlackRock warned investors to expect a recession, persistent inflation, and an era that requires a more “nimble” approach in its 2023 Global Outlook this week.
The market rally faces big tests with the upcoming CPI inflation report and Federal Reserve meeting. Here's what to do.
Billionaire AOL co-founder Steve Case argues that the next “mega trend” in tech is here as the government focuses greater scrutiny on Big Tech and Silicon Valley.
This bank stock was beaten down this year for understandable reasons. But the selling effort went too far.
What went right and what (mostly) went wrong for the prominent asset manager Cathie Wood at Ark Investment.
If you want to know who really controls Summit Therapeutics Inc. ( NASDAQ:SMMT ), then you'll have to look at the…
How To Make Huge Profits In A Short Time With CryptoGet detailed training system that shows an absolute beginner (without any skill) how to make huge profits in a short time with crypto.
Crypto + NFT Quick Start CourseThe #1 course for profit in the Crypto & NFT world - You will discover the secrets that 99% of people don’t know yet
