Cryptocurrency

Cryptocurrency refers to virtual or digital forms of currency that utilize cryptography for transactions. Crypto assets offer a value that can be stored, transferred, or traded electronically. However, in some instances, crypto investors could be scammed if unaware of the various trade procedures. Thus, although crypto is considered a new financial asset class, there are various instances that crypto investors get scammed.

Cryptocurrencies, such as the bitcoin, are considered a new class of assets as more investors participate in the bitcoin trade. Numerous individuals join the bitcoin trade daily, indicating a potential establishment of a more complex digital assets portfolio (Krückeberg & Scholz, 2019). However, although crypto offers numerous benefits to traders, there are considerable risks associated with the trade, including increased bitcoin financial scammers. For instance, the federal trade commission (FTC) registered approximately 7000 cases of crypto theft, with a combined value of $80million between October 2020 and March 2021 (Tepper, 2022). This indicated that as the new digital class of assets takes root in the market, more fraudsters are out to scam bitcoin miners with less knowledge of the digital trade market. The increased scams are due to the inability to track or recapture crypto transactions once a transfer is done (Tepper, 2022). Most investors prefer crypto to trade as it is less controlled by the government and involves few or no regulations. However, an investor should seek details regarding bitcoin mining and establish the different strategies fraudsters use to avoid being scammed, as most people get scammed due to a lack of knowledge (Krückeberg & Scholz, 2019). Another lesson learned from the new digital asset class is the potentially rapid growth of digital assets shortly. Thus, cryptocurrency is a new class asset, but an investor could be easily scammed if not well informed about digital trade strategies and fraudster techniques.

Although crypto is considered a new financial asset class, there are various instances that crypto investors get scammed. Hence, investors should be aware of the tricks used by fraudsters and be well informed of the trade market trends. Investors should also be aware of the possible surge of crypto transactions shortly.

References

Krückeberg, S., & Scholz, P. (2019). Cryptocurrencies as an asset class. Cryptofinance and Mechanisms of Exchange, 1–28. doi.org/10.1007/978-3-030-30738-7_1

Tepper, T. (2022, May 18). Watch out for these 4 bitcoin scams. Forbes. forbes.com/advisor/investing/cryptocurrency/bitcoin-scams-fraud/