Bitcoin crosses $100k: What are some crypto dangers you should be aware of?
The Hindu
Bitcoin crossed $100,000 for the very first time this month. What are some hidden dangers investors must be aware of?
Social media was aflame with euphoria and glee on December 5 as Bitcoin crossed $100,000 for the very first time, buoyed by investors’ hopes in a pro-crypto Trump administration. As Bitcoin’s value spiked, other cryptocurrencies and tokens followed suit. During that week, Ripple’s XRP surged by almost 50%, TRON’s TRX shot up by more than 60%, and Hedera’s HBAR rose by a formidable 90%. Meme coins and tokens were also riding high as Elon Musk’s DOGE - Department of Government Efficiency - as well as the ticker for the Dogecoin currency, entered the common lingo.
Several investors are now wondering whether to enter the buzzing crypto economy, while others are making their first crypto trades to capitalise on the spurt in price. Such a market environment is also filled with dangers.
Here are some potential pitfalls and risk factors that every crypto investor should be aware of.
There are countless ways to dupe aspiring crypto investors who want to make a quick buck without bothering to learn about the market.
Malicious actors often try to lure in buyers with meme coins that are based on popular cultural references. These tokens can enjoy skyrocketing prices in a matter of hours or days, luring others to buy huge volumes of the token. Soon enough, many investors will realise that their tokens cannot be sold or returned as the makers of those cryptocurrencies will abscond, leaving no trace of their digital footprint.
Alternatively, the tokens can be sold normally, but the creators may hold large amounts of the currency themselves; when the prices are high enough, they quickly sell their assets and cash out. This causes the overall market cap of the token to crash, leaving other investors with nearly worthless assets.
While crypto hacks remain an ever-present risk all-year round, hackers and scammers are especially incentivised to try and dupe customers when crypto prices rise high. With Bitcoin crossing $100k, hackers know that there will be a large pool of new and curious traders who are looking to invest their money.
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