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Lester Daniels's Avatar
published in Blogs
Nov 19, 2021

How to Avoid Bitcoin Scams

Before 2017, Bitcoin was mostly the province of cryptocurrency enthusiasts, with little mainstream recognition. But everything changed as prices skyrocketed. New investors jumped into the fray, eager to make their fast fortunes. Keeping with time-honored tradition in any booming market, scammers proliferated, equally keen to fleece neophyte, under-informed investors.

Cryptocurrency investment may seem like a free-for-all, but using a little caution can go a long way. Let’s review some of the most common bitcoin scams, as well as the steps you can take to avoid them.  

Stolen Wallets

Physical wallets are a popular, secure option for storing private keys – whether made of paper or a hardware wallet, like a USB stick, keeping keys offline adds an extra layer of security to investors’ holdings. Users should be careful to store their paper and hardware wallets in safe places, to eliminate the threat of theft. Additionally, investors should research hardware wallet providers to ensure safety and trustworthiness. Vendors hawking “pre-configured” wallets should be looked at especially carefully – a recent scam involved selling hardware wallets with a seed phrase on a scratch card that, while theoretically hidden, are actually compromised, allowing hackers access to funds as soon as the wallets are activated.

Fake ICOs

ICOs, or Initial Coin Offerings, have allowed companies to raise capital without taking VC money, which also generally comes with loss of autonomy. This take on crowd-sourcing is becoming increasingly prevalent, but scammers have also taken advantage of this popular system to separate investors from their holdings through fake websites and compromised wallets. It is vital to research the companies you are considering investing in – pick over the whitepaper with a fine tooth comb, and perform due diligence on the board of directors and other investors to determine a company’s validity.

Exchange Fraud

Like stocks, cryptocurrencies are traded at exchanges. Unlike the stock market, however, regulatory oversight is relatively minimal with virtual coins. This landscape is changing, but as authorities play catch-up, it is important for investors to pay attention to some basics. Discounted coins, offered as incentives to join and trade on an exchange, are a major warning sign – deals that seem too good to be true probably are just that. Non-encrypted exchange websites, denoted by ‘http://’ instead of ‘https://’, should also be avoided to maximize asset security.

Mining Scams

Bitcoin mining requires significant effort and resource investment, creating a high barrier to entry for the average person. Enterprising companies are offering users a chance to mine coins for a set rate, essentially renting existing mining infrastructure for personal use. But users should beware companies guaranteeing blanket returns on investment; coins become progressively more difficult to obtain as more are mined, leading to decreasing returns. Do your homework on each mining company – look for detailed information about operations, measure the level of transparency surrounding the company, and beware of ‘grand promises’.

Pyramid Schemes

Pyramid schemes (also called multi-level marketing schemes), which offer not only quick returns but also increasingly-extravagant perks in exchange for proportionally larger investments, are becoming more prominent in cryptocurrency. Assurances of too-good-to-be-true earnings usually are too-good-to-be-true. Stay away from companies promising the moon, even if you might get a new Apple Watch out of the deal. Read the websites thoroughly, but also look for outside sources that independently validate a company’s claims.

Doing the bare minimum as an investor can save you a world of regret. Solid research, coupled with a healthy dose of skepticism and an immersion in details, will help minimize mistakes and avoid fraud as you embark on your journey in cryptocurrency investment. Trust your gut, vet your options, and keep both feet firmly planted in reality – the more you do so, the better your chance of maximizing your earnings.

Related Ticker: BTC.X

BTC.X in +5.11% Uptrend, growing for three consecutive days on May 28, 2023

Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where BTC.X advanced for three days, in of 447 cases, the price rose further within the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on May 28, 2023. You may want to consider a long position or call options on BTC.X as a result. In of 127 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for BTC.X just turned positive on May 27, 2023. Looking at past instances where BTC.X's MACD turned positive, the stock continued to rise in of 59 cases over the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

BTC.X moved below its 50-day moving average on May 07, 2023 date and that indicates a change from an upward trend to a downward trend.

The 10-day moving average for BTC.X crossed bearishly below the 50-day moving average on May 10, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 21 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where BTC.X declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

BTC.X broke above its upper Bollinger Band on May 28, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for BTC.X entered a downward trend on May 19, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

Market Cap

The average market capitalization across the group is 537.11B. The market cap for tickers in the group ranges from 537.11B to 537.11B. BTC.X holds the highest valuation in this group at 537.11B. The lowest valued company is BTC.X at 537.11B.

High and low price notable news

The average weekly price growth across all stocks in the group was 3%. For the same group, the average monthly price growth was -4%, and the average quarterly price growth was 59%. BTC.X experienced the highest price growth at 3%, while BTC.X experienced the biggest fall at 3%.

Volume

The average weekly volume growth across all stocks in the group was -100%. For the same stocks of the group, the average monthly volume growth was -100% and the average quarterly volume growth was -100%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating:
P/E Growth Rating:
Price Growth Rating:
SMR Rating:
Profit Risk Rating:
Seasonality Score: (-100 ... +100)
View a ticker or compare two or three
Technical Analysis# Of IndicatorsAvg. Odds
   
   
Show details...
A.I.Advisor
published price charts
Interesting Tickers
1D
1W
1M
1Q
6M
1Y
5Y
1 Day
CRYPTO / NAMEPrice $Chg $Chg %
ETH.X1863.880000-37.146606
-1.95%
Ethereum cryptocurrency
NULS.X0.217100-0.011987
-5.23%
NULS cryptocurrency
CVX.X4.152000-0.247443
-5.62%
Convex Finance cryptocurrency
MOB.X0.634000-0.040860
-6.05%
MobileCoin cryptocurrency
IDEX.X0.078150-0.006675
-7.87%
IDEX cryptocurrency

BTC.X and

Correlation & Price change

A.I.dvisor indicates that over the last year, BTC.X has been closely correlated with BTCUP.X. These tickers have moved in lockstep 100% of the time. This A.I.-generated data suggests there is a high statistical probability that if BTC.X jumps, then BTCUP.X could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To BTC.X
1D Price
Change %
BTC.X100%
-2.21%
BTCUP.X - BTC.X
100%
Closely correlated
-3.70%
ETH.X - BTC.X
89%
Closely correlated
-1.95%
ETHUP.X - BTC.X
88%
Closely correlated
-3.98%
RUNE.X - BTC.X
87%
Closely correlated
-2.85%
GNO.X - BTC.X
84%
Closely correlated
-2.35%
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