With the sudden interest that has popped up in the crypto world, many people are wondering how to get into crypto trading. But before you start investing, you should be aware of the risks and some things you should do to protect yourself.
Bitcoin performance doesn’t appear to be directly correlated to stocks
With all of the sudden interest that the performance of the cryptocurrency Bitcoin doesn’t appear to be directly correlated to the stock market, you might wonder if this trend will continue. However, it is essential to remember that many factors are at play and that it is unlikely to be a one-dimensional phenomenon.
First, there are different types of correlation. For example, the correlation between the S&P 500 and Bitcoin has changed significantly in the last three years.
This is because cryptocurrency is not under the same regulations as stocks. Additionally, demand, supply, and investor sentiment have also affected the prices of both. While each performance is not correlated, it is common for each to rise during times of high demand and fall during times of high uncertainty.
Avoid investment scams
If you are getting into crypto trading, look for scams. Several investment scams include Ponzi schemes, exit scams, and “rug pulls.” Here are some tips for avoiding them.
Scammers usually set up elaborate websites and fake trading platforms. They then contact people via email and social media. They promise a high rate of return and ask for large amounts of money. Once their victims’ money runs out, they disappear.
These scams use celebrity images and language to create credibility. In some cases, fraudsters pay actors to pose as wealthy individuals.
One red flag is an online stock message that claims to have inside information. Paid promoters or an insider may write the message. It may also urge readers to buy the stock right away.