Bitcoin (BTC -3.91%) could also be on the cusp of actually going mainstream, however the crypto market continues to see no scarcity of recent scams. And it would not matter how huge or refined of an investor you is perhaps. Even billionaires and longtime savvy buyers can get duped by crypto scammers.

The excellent news is you could take a number of primary steps to safeguard your crypto investments and keep away from most crypto scams. Let’s take a more in-depth look.

Use ETFs each time potential

Arguably, the most secure technique to put money into crypto is by investing solely in exchange-traded funds (ETFs) for particular cryptocurrencies. You should buy and commerce these ETFs the identical approach you’d a tech inventory, so there isn’t any studying curve concerned. You do not have to open any new accounts. Plus, you may sleep straightforward at evening, figuring out that each ETF has a seal of approval from the Securities and Change Fee (SEC). That helps to clarify why the brand new spot Bitcoin ETFs have been so fashionable.

As new ETFs roll out for different cryptocurrencies past Bitcoin, you can slowly diversify your crypto holdings. For instance, the SEC lately accepted new ETFs for Ethereum (ETH -0.84%), so these are coming quickly. And a few have urged that Solana (SOL -5.12%) is perhaps the crypto subsequent in line after Ethereum to get its personal spot ETF.

Select a trusted crypto-trading platform

For a lot of buyers, although, an ETF-only technique might be too limiting. You may must discover a secure place to purchase and promote your crypto, and cryptocurrency exchanges akin to Coinbase International (COIN -3.59%) are a well-liked selection.

Since Coinbase is regulated by the SEC, it has some sturdy safeguards in-built. For instance, Coinbase will not listing a crypto for buying and selling until it meets sure key standards. And since Coinbase is a publicly traded company, it must run a squeaky clear ship and supply audited monetary statements. Coinbase additionally has best-in-class safety defending its crypto vaults, so you do not have to fret a couple of cyber heist.

However Coinbase is hardly the one choice in the case of crypto-trading platforms. There are actually dozens of potential choices. The Motley Idiot Ascent has analyzed many of those and decided which of them are the most effective for purchasing Bitcoin, in addition to which of them are the most effective for purchasing altcoins (i.e., all cryptos aside from Bitcoin).

It is necessary to do your individual due diligence right here. Bear in mind — everybody thought FTX was a reliable cryptocurrency change till it collapsed in November 2022. In hindsight, we now know that former FTX CEO Sam Bankman-Fried was utilizing buyer funds for proprietary buying and selling operations on the similar time he was lining up celeb endorsements.

Set clear funding guidelines

Lastly, it is necessary to set a number of up-front guidelines of which cryptos you’ll put money into, in addition to which cryptos you’ll not. No surprises right here, however the cryptos most definitely to be the goal of a scammer are these with tiny market caps and restricted buying and selling liquidity.

As a basic rule of thumb, it’s best to keep away from cryptos that aren’t supplied for buying and selling on the highest crypto exchanges. And it’s best to keep away from cryptos which are below a sure market-cap threshold. Proper now, a wise goal can be a $1 billion market worth. That will provide you with entry to the highest 100 cryptocurrencies as ranked by market cap. However if you’re significantly risk-averse, you would possibly think about bumping that quantity up to $5 billion, which is able to restrict you to simply the highest 25 cryptos.

Maybe the most effective recommendation right here is to keep away from any crypto that appeals to get-rich-quick buyers. Sadly, which means meme cash ought to be off your funding radar. Whereas fashionable meme cash can soar in worth for a short time frame, their long-term attraction could be very restricted. The scenario is even worse for meme cash with tiny market caps, which are sometimes topic to excessive market manipulation akin to pump-and-dump schemes.

Be a greater educated investor

On the finish of the day, the higher educated you might be about crypto, the higher off you may be in the case of avoiding traditional crypto scams. For instance, if you’re planning to carry crypto tokens in a blockchain pockets, you should familiarize your self with the fundamentals of blockchain wallets. That approach, you will not be tricked into freely giving your cryptographic keys to an unscrupulous scammer who will use this data to raid your account.

Happily, crypto goes more and more mainstream, and the crypto market is beginning to really feel much less and fewer just like the Wild West with each passing yr. Because the regulatory setting tightens up, and as huge Wall Avenue buyers get entangled with crypto, the chance of scams will seemingly decline over time. However till that occurs, it is definitely value your time to discover the most secure methods to put money into crypto proper now.