Recently, cryptocurrency trading has reached peak popularity. It is now impossible to find a modern trader who hasn’t heard of the most famous crypto exchanges or hasn’t considered trying their hand at trading such assets. In this article, we will answer the question: is cryptocurrency a scam or not for today’s market players, and explore how you can earn money with this instrument. We will also identify common mistakes and subjective assumptions that influence the modern world of cryptocurrency. By the end, readers should have a clear understanding of how to generate income by operating with “cryptocurrency.”
Why specifically crypto and not other exchanges?
Many participants in the stock market are intimidated by several factors. The first is decentralization. Unlike assets traded on other platforms, no single controlling or dependent authority exists for cryptocurrencies. For example, shares of a particular company depend heavily on its operational success, and achieving the best results requires many macro- or microeconomic factors. The price of cryptocurrencies is influenced solely by the market. No decision by even the most powerful or influential government can exert long-term influence on the price of any crypto asset. In the early days, many coins were considered unpredictable assets, but today, with high interest from multinational corporations and even governments, the exchange rates are formed on principles similar to traditional markets — based solely on current market trends with high predictability for each specific period.
The next factor raising doubts is the technology behind new coin issuance. Most assets are based on blockchain algorithms, a modern technological solution for distributed data storage. Some traditional market players were initially frightened by a lack of understanding of how these systems work. Now, traders use both classic hedging methods and their own mining farms to access the needed liquidity when necessary. They are not only trading but also actively participating in the development of the entire ecosystem.
We earn in many ways
A broad choice of earning methods is another clear advantage of cryptocurrencies over other stock assets. Holding specific coins can be used for trading, depositing, legally and safely lending to other participants, or discovering new assets with high growth potential. In traditional finance, accessing all these opportunities often requires obtaining banking licenses. For cryptocurrencies, just one registration on an exchange grants access to all this functionality.
Trading through a trusted intermediary
Since cryptocurrency is a digital tool, hundreds of platforms for trading can be found online. Choosing an unreliable platform is a common mistake among traders of all levels. The easiest way is to study the criteria for working with a particular company based on reviews from other users who have already used the platform’s functionality. Usually, this information is plentiful, so beginners should evaluate exchanges based on the following criteria:
- How reliable is the broker? Assess based on feedback from open sources.
- Ease of depositing and withdrawing funds. An important point — some platforms only allow transactions in the same assets being traded. But this is not a big problem because the world’s most well-known crypto trading companies offer free exchanges between cryptocurrencies and fiat currencies, either directly through their functionality or with the help of third-party services.
- The number of offered contracts. An important criterion. Initially, inexperienced traders won’t be able to trade many assets, but with experience, the need to expand the range of tradable assets will arise. Therefore, it’s better to choose a platform that offers not only a large selection of coins but also other instruments like options and stablecoins.
- Ease of working with the trading software. An important but not decisive criterion. It’s better to spend some time mastering the technical principles of working with the terminal than to switch to another company.
- Working with a licensed company. Even though many government agencies do not consider licensing necessary for such platforms, having a regulatory financial document is a significant advantage when choosing an exchange. Currently, such regulatory documents are available in Japan, Hong Kong, Singapore, the UK, and some other countries. In Russia, such legislation has not yet been developed. If the headquarters of the selected platform is in a country requiring licensing of cryptocurrency activities, it’s important to verify this. It guarantees that all transactions are conducted on fair exchange terms.
Lack of knowledge
This refers not just to knowledge about trading cryptocurrencies but to trading skills in general. Cryptocurrencies have the same fundamental and technical factors influencing their prices as other exchange assets. If a novice cannot interpret these factors correctly, it indicates a need to improve their theoretical base. Of course, much of this knowledge comes with real trading experience, but many exchanges offer demo trading options for learning. Spending some time on education will help traders identify knowledge gaps and determine the future development path as successful market participants.
Many negative reviews of crypto platforms clearly show that the real issue lies in lack of knowledge — the main factor causing losses in trading. Therefore, it’s crucial not only to carefully select a suitable exchange based on the specific trading system and evaluate whether its capabilities are genuine but also to have the necessary knowledge or understand that it must be acquired.
Conclusion
In conclusion, the answer to whether cryptocurrency is a scam or not is definitively negative. Today, it is just as high-yielding an asset as traditional stocks. But it offers broader earning opportunities and potential for growth in the digital world. Therefore, every trader should consider using these tools in their daily activities, regardless of their skill level. It’s likely that, over time, many crypto assets will become primary income sources, as already proven by many honest traders and major asset management firms.
