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We’d all like to find an easy way to make money. But of course, no such thing exists, because supply and demand mean that if there is something easy and lucrative people then will pour into it until the return is the same as the other options.
Anything that pays well has to require unusual skill, or be risky, or be hard work – usually all three.
But maybe crypto is different, “because we’re still in the early days” (we’re not) or “people don’t really understand it” (yes, YOU don’t either!) or “it’s outside of the normal business world” (it is, but there is a different kind of ‘business’ in full swing there).
TEN ways to lose your money:
(and these are only the ones I know about!)
1 – Gamble on buying currency
Yes it’s much more volatile than currencies like dollars, so you can gain more, …or lose more. Will the value of bitcoin etc gradually rise over time? – nobody knows! Even exerts don’t know – if they did they would bet on it to the point where the price would go up NOW and you wouldn’t be able to make a profit on it anyway. But they don’t know, nobody does.
“But it will surely rise steadily over the longer term, like stocks and shares, and property do…?”
Will it? Here’s a graph of the last 12 months:
![](https://www.chriscroft.co.uk/wp-content/uploads/Screenshot-2022-04-12-at-12.21.50-1024x583.png)
That’s a 30% drop. But maybe it’ll go up over the next 12 months – who knows?
This is just a gamble, you are going in with no knowledge at all. Fine, as long as you know that. I did actually buy some bitcoins in 2018 and sell them in 2021, and I did make a decent profit, but I would have made more if I’d sold them sooner, and if I’d sold them later, and I knew all along that it was a bit of fun, with money I could afford to lose. You can’t make a living gambling like this, and don’t put your life savings into it.
2 – Day trading
There are constant little fluctuations in the value of anything, e.g. the pound vs the dollar, or the price of a cryptocurrency. In fact the crypo fluctuations tend to be bigger, so day trading looks even better. You just (probably with the help of software) buy at the bottom and sell at the top, lots of times a day, making a small profit each time. You can’t lose! Maybe invest the profit back in so your trading balance increases every day. Brilliant!
But have a look on Wiki and it says “Day trading is an extremely stressful and expensive full-time job”.
But what’s the catch? The answer is that the fees are higher than you might think, and then sometimes the currency (especially if it’s crypto!!) goes outside your ranges and you get wiped out. Like betting on roulette and doubling your bet every time – it doesn’t work because zero comes up occasionally.
Which is obvious really, because if you think about it for even five seconds, why isn’t everybody doing it? Why don’t people in The City who are very clever and have millions of pounds just do this, and clean up? How are you going to do it better than them?
3 – New types of coin
“Get in at the ground floor”. “Make huge gains like the early Bitcoin adopters did”. Or lose everything – which is quite likely with a new coin. If you know WHY a new coin is different and will be successful, if you REALLY understand it, then OK, go ahead and gamble, but otherwise you’d be mad to.
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4 – “I’ve got a hot tip”
Tips and rumours are SO tempting. “Buy these shares or coins, they’re a bargain, they are about to go up!”. Of course, insider dealing does exist, and it’s illegal. But most rumours and tips are useless because they reach you too late. As soon as they are out, people will buy (or sell) and that will already be factored into the price by the time the rumour gets to you. So you are buying shares, or coins, that are ALREADY over priced, you are buying them at the worst possible time. Unless you can be sure that you are the first person to hear that rumour – can you do that?
5 – Buy a bot, or any ‘method’, from someone who has created it
I would say don’t get into crypto unless you have learned to code and made your own arbitrage trading bot. Have you done that? A friend of mine has, and he has made quite a lot of money. But he’s VERY clever, works VERY hard, and takes BIG risks. Is that you? It certainly isn’t me!
And he wouldn’t sell his bot – why would he? Why would be sell it for less than it can make? The only time he’ll sell it is when it’s out of date, it’s become too slow to compete. like an old car that will die soon.
It’s the same with clever methods of making money from crypto – why would someone sell it to you? Why wouldn’t they just keep it for themselves and turn the handle?
And that goes for MINING as well – if it’s so great then why are people offering to help you get into it? >It’s not money for free because of the cost of the massive computers and the electricity, and your time that’s needed. And as the amount of bitcoins still available to be mined diminishes it gets harder and harder, so you’re joining a market that is only going to get worse.
6 – They need investment in their brilliant scheme
“Put some money in and you’ll get a share of the profit”. If someone really has got a great scheme they’ll easily be able to get money to put into it, and they won’t want to share the profit.
7 – “You pay me and then others will pay you“
This is known as a pyramid scheme or Ponzi scheme. If you don’t know about them, or don’t fully understand them, then don’t even START on a crypto-based one. Yes you can make money from them but a) only if you’re in early and it’s almost certainly already too late by the time you hear about it
b) statistically it’s stacked against you because the whole design is that for each one person that makes money hundreds have to lose out, and do you KNOW you’ll be that one?
and c) it’s unethical if you do make money because as you well know there will be lots of ‘investors’ at the end who are left carrying the can, they have paid in, just like you, and never got the promised money out.
8 – Rug pulling
You put a bit in and you get profit out. So you put a bit more in, and you get more out. “This is great!” So you put loads in. And then, er, nothing comes out. They either disappear, or they are very apologetic “but something has changed and it’s not working any more. But you understood there were risks when you started, didn’t you?”
However good your current scheme, what guarantee do you really have that the rug isn’t about to be pulled?
9 – Pay for training
The crypto world is like the Wild West, with very fast gun slingers around very corner, and innocent suckers coming for the gold rush, buying over priced shovels and rights to land that has no gold in it.
The overpriced shovels are the training courses you can get. There is money in making these, and the advice is probably fine, but if it was REALLY great they wouldn’t be giving it away, or selling it for any price. Then, for you to implement the advice will require hard work and risk – if the returns are quite low you’ll have to invest a LOT of capital, and do you really want to do that?
A training course for easy answers is really just an easy answer, with a cost attached – and I think we’re establishing that easy answers come with a catch.
One exception – learning how to code, maybe Solidity, and then learning how Etherium works, how exchanges work etc – that would be worth learning, in fact essential to get some training.
10 – “I’ve spotted a loophole”
There are very clever people looking for loopholes all the time. Can you spot one quicker than anyone else? (Have you learned to code yet, by the way?). There are even apparent loopholes which are set as traps, so you put money into exploiting it (e.g. something seems accidently too cheap) before discovering the catch. The people who design these traps are CLEVER.
![](https://www.chriscroft.co.uk/wp-content/uploads/pexels-thought-catalog-2228570-1024x767.jpg)
So – it’s a jungle, infested with sharks, waiting to pick your pocket at every corner. I only know one person who is genuinely successful, and who I can really trust – and he says you’d be MAD to go into that jungle, you will be separated from your money almost immediately.
Regulation will catch up, it’ll get safer, but the cons and schemes and get-rich-quick promises will last for a good few years – so you’re welcome to it, but don’t say you weren’t warned.
But if you want to learn coding, and you’re in the top 1% for brains within that field, and you want to work really hard, and become an expert after a year or two, and take some big risks, …then you CAN make money from Crypto.
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PS – Are you considering getting into training? Would being a freelance trainer suit you? Get more information here: www.becometrainers.com
What are the potential risks associated with investing in cryptocurrencies like Bitcoin, especially considering their high volatility? How do experts approach the uncertainty regarding the future value of cryptocurrencies?
What is this – an exam question?? Also, I have written a blog post on this – search my site for the word Crypto