Cryptocurrencies were among the best-performing assets in the year 2021 as more and more investors started putting their money in digital currencies to make a quick profit. However, investing in crypto assets is a risky affair that is prone to wild price swings. Therefore, maintaining a balanced crypto portfolio of various cryptocurrencies can help against extensive losses.
As cryptos are still unregulated, it is prone to price volatility and at the same time are exposed to various common pump-and-dump scams or rug pull scams. To ensure one doesn’t make a poor investment choice, it critical for investors to do their respective in-depth research, study market trends, and understand how favourable it will be to invest in cryptos.
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Scams in cryptos
While pump and dump scams have always been around stock markets, the year 2021 showed that the crypto markets aren’t immune from them either. The idea behind these scams is that investors with large crypto holdings promote these assets to encourage further investments, which results in a price surge. However, when the prices reach a certain level, they often wield their influence to pull down the price of the crypto, leaving crypto prices to crash.
The prominent examples of the pump and dump scam are the Squid Games or the SaveTheKids token.
Another common scam in the crypto circle is the “rug pull”. Rug pull refers to a situation…
