How to Secure Your Investments in Cryptocurrency – Main Mistakes

The demand for cryptocurrency investments continues to grow not only among retailers but also among institutional onesinvestors. According to a recent survey by the Gemini crypto exchange, 14% of Americans have already invested in cryptocurrency and by the end of the year this number may double.

However, buying cryptoassets is essentialdiffers from investing in traditional financial instruments, writes RBC Crypto. Let's figure out what risks arise when investing in crypto assets and how they can be avoided.

The main risks when investing in cryptocurrency

Experts named three main risks for an investor who decided to buy digital currency.

High volatility

High volatility is a key featurethe cryptocurrency market, explained the co-founder of the EXMO crypto exchange Ivan Petukhovsky. The first recommendation he gave to novice crypto investors is not to panic, since a strong fall is likely to be followed by an equally strong growth.

Before buying a coin, you need to assess the historicalthe behavior of its price, as well as the average change per day / month, the expert recommends. According to him, this will help to understand the level of volatility and assess their readiness for such risks.

“Investors fearing volatility are advised to avoid trading in the cryptocurrency market, as volatility is its key characteristic. But she, among other things, helps to earn money ", - said Ivan Petukhovsky.

It is better to make the first investments in cryptocurrencyin the spot market, since margin trading in the absence of the necessary skills is likely to lead to losses, says the co-founder of the EXMO crypto exchange. And if on the spot market the losses will conditionally amount to one, then with margin trading, depending on the chosen leverage, you can lose dozens of times more.

Improper storage

It is not secure to store digital assets oncrypto exchanges, the only exceptions are a few of the largest sites, warned the head of the Six Nines data center Sergey Troshin. According to him, while the cryptocurrency is on a third-party platform, in fact, it does not belong to the investor.

“It is best to store cryptoassets on a hardwarewallet. The second option, if there is no desire to buy a special device, can be storage on your work computer - or on a separate one, which is rarely used ", - the expert noted.

If we are talking about crypto trading, then go forthe risk is necessary and the coins will have to be stored on crypto-exchanges, but if the plans are long-term, it is better to choose a more reliable storage, for example, the largest cryptocurrency exchange Binance.

Errors when sending funds

If an investor accidentally sent cryptocurrency tothe address in which the mistake was made, then it will be impossible to return the coins, they will burn, explained Mikhail Karkhalev, financial analyst of the Currency.com crypto exchange. According to him, there are no managing organizations and third parties on the blockchain who can be asked to cancel the transaction.

"Blockchain is a decentralized network that has no managers, no administrators, no support services.", - said the analyst.

How to store cryptocurrency securely?

When buying digital assets, an investor is faced with the problem of their further storage. For the safety of cryptocurrency, you must adhere to some rules.

Key safety aspects

For registration on crypto-exchanges and otherscryptocurrency services will not work with a general email account that is used daily for personal purposes. It is better to register a separate mail and use it only for digital coin transactions. The same should be done with the phone number.

In 2019, New York teenager Yousef Selassiestole the data of 75 people and over $ 1 ml in digital money. He cloned the victims' phone numbers in order to gain access to their email and marketplace accounts.

When working with cryptoassets, it is worth enabling protected mode in the browser, which stops writing cookies, cache and other system information containing user data.

There are cases when attackers changed thesearch results of addresses of cryptocurrency platforms, which led to the theft of user data. To avoid this, you need to save the address of the crypto exchange or enter it into the browser line yourself.

Diversification in business

It is worth distributing assets not only wheninvesting, but also when storing cryptocurrency. For example, it is better not to store large amounts on crypto-exchanges, since there is always a risk of being hacked. Digital coins on the cryptocurrency exchange do not actually belong to their owner, since they are located on the site's wallet, which can suffer from the actions of intruders.

For 8 years, hackers have stolen more than $ 13.6 billion incryptocurrency, having made over 330 hacks of exchanges, wallets for storing digital assets and decentralized applications. Most of the stolen funds fell on exchanges and online wallets - about $ 12 billion.

When buying digital coins for long-termthe prospect is better to store them in a cold, or hardware, wallet. It is recommended to store the amount of funds required for trading on a crypto exchange. If the amount of investment in a cryptocurrency is impressive, then it should be distributed among several cold wallets. Then, if one of them is hacked, the funds on the other will not suffer.

Personal data above all

When dealing with a cold wallet thatinstalled on a PC or mobile device, it is also worth protecting your funds by saving a seed phrase in a secure place (a set of random 12, 18 or 24 words to restore access to the wallet). Typically, the seed phrase is printed on paper and stored along with important documents.

Last year, British entrepreneur AlistairMilne ran an experiment to find out how long it would take for hackers to break into his wallet. To do this, he published 8 words from his seed phrase from the wallet that stored 1 bitcoin. After 44 hours, the hacker managed to gain access to the storage and take possession of the cryptocurrency. The hacker learned the remaining 4 words by the method of selection.

Where is it more profitable to buy cryptocurrency? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.

The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest cryptocurrency exchange in the world is Binance. Binance is also the most popular crypto exchange in Russia and the CIS, since it has the largest cash turnover and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.

Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?

Rating of cryptocurrency exchanges:

#	Exchange:	Website:	Rating:
1	Binance (Editor's Choice)	https://binance.com	9.7
2	Bybit	https://bybit.com	7.5
3	OKEx	https://okex.com	7.1
4	Exmo	https://exmo.me	6.9
5	Huobi	https://huobi.com	6.5

The criteria by which the rating is set in our rating of crypto-exchanges:

• Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
• Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
• Feedback and support– we analyze user reviews and the quality of technical support.
• Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
• Platform Features– availability of additional features — futures, options, staking, etc.
• final grade– the average number of points for all indicators determines the place in the ranking.

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