Crypto Investors Unable to Access Their Money: 8 Things to Consider Before Investing in Cryptocurrency
The New York Times recently announced that the US and Canada crypto investors are unable to access their money amounting to $250 million. This drama started after the founder of Quadriga CX cryptocurrency exchange –Gerald W. Cotten – was reported dead.
The shocking revelation leftinvestors finding themselves unable to retrieve money in their accounts. The company’s operations were encrypted, and Gerald Cotten was the only person who knew the password required to move the funds.
The Cause of Cotten’s Death
In January this year, the wife of the crypto exchange founder testified that her husband unintentionally took at least $137 million of customer assets to the grave when he died without giving anybody the password to his encrypted laptop.
In February, Cotten’s wife submitted an affidavit claiming that her husband suddenly died while having a vacation in India, at the age of 30. She alleged the cause of Cotten’s death was complications associated with Crohn’s disease.
Thus, Quadriga CX cryptocurrency exchange lost control of over $137 million of customer assets because the company’s operations were stored on a laptop, which – according to the window’s affidavit – only Cotten knew the password.
Basic Things to Put into Consideration
So, here are 8 things crypto investors should consider before investing in cryptocurrency.
1. Never Invest Above Your Means
It’s advisable that crypto investors only to invest money, which they are willing to lose. It must be money you don’t need in your day-to-day life. If you lose that money, then your life should not be affected. Furthermore, it would help if you don’t take a consumer loan to invest.
2. Ensure You Know What You Are Buying
The Russian proverb says that “trust but verify.”
Therefore, you should not blindly trust anyone. You don’t need to be an expert in cryptocurrency to make the necessary evaluations. But you just need to take time to help you understand what you are investing in and how comfortable you are making such an investment after you have understood the information at hand.
There are over 2000 cryptocurrencies, which are actively being traded every day. So, you need to take time and learn about cryptocurrencies existing.
3. Find A Trustworthy Crypto Exchange
If you want to begin investing in cryptocurrency, then crypto exchanges will be essential. But only invest in reputable cryptocurrency exchanges that are legally accredited by relevant authorities.
4. Diversify Your Investments
If you have money to invest, then you must be aware of the saying that “you should not put all your eggs in one basket.” If you put all your eggs in one basket and it falls, then you lose everything. So, if you have 10 eggs, then divide them evenly into 5 baskets.
It is prudent to apply the same reasoning approach to your investments. You should divide them, such as some of your investments go in real estate, others channeled to actions, and part in the cryptocurrencies.
5. How to Buy Cryptocurrencies
It is appropriate to begin investing in very popular cryptocurrencies like Bitcoin, Ethereum, or Monero and to diversify into other few altcoins. Smaller coins normally carry more risk of failure and are more volatile, and it’s hence advisable to avoid them.
6. Secure Your Cryptocurrency
The need to secure your cryptocurrencies should be the main priority for a long-term investor.
7. Watch Out for Scams
You need to be vigilant about scams and avoid them as much as possible.
8. Find Trusted People You Can Follow
Don’t walk alone. You need to find reliable people who can help you with your investments. The environment is filled with scammers or individuals who only want to manipulate you for their advantage. So, you should be vigilant and choose people carefully.
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