Mistakes made by F0 investors in the cryptocurrency market

The cryptocurrency market is growing rapidly and attracting many new investors. However, due to inexperience, users lose money easily due to fundamental problems.

As the price of cryptocurrencies continues to rise, the number of new investors entering the market is increasing. Finder’s statistics show that Vietnam tops the list of countries with the highest percentage of cryptocurrency holders. Accordingly, 40% of survey participants in Vietnam said they owned or had bought cryptocurrencies.

However, being new to the market with no financial or technological skills, many investors lose their fortunes when trading cryptocurrencies.

Mistakes made by F0 investors in the cryptocurrency market. Join if you do not have sufficient financial and investment knowledge

Dr. Ho Quoc Tuan, Senior Lecturer in Finance and Accounting at the University of Bristol (UK) believes that newbies to the cryptocurrency market need to understand whether they are suitable for this type of investment and equip themselves with knowledge.

Mr. Tuan informed us that, like any other market, cryptocurrencies also harbor risks and opportunities. As risks in the coming period, it can be mentioned that the market has grown strongly, the positive news is gradually fading. Many projects can delay new information until next year, and governments are also stepping up their work in this area.

On the other hand, there are still many opportunities in the market, such as potential IDO rounds planned in advance.

“Every market has risks and opportunities, it is important to understand them. Investors need to “do their own homework” to find these opportunities. The cryptocurrency market is about learning from the community itself, learning the whitepapers, and understanding more about technology, ”Tuan said.

Not being fully equipped with financial literacy, new investors easily fall into FOMO (Fear Of Missing Out). This sentiment will drive investors to buy cryptocurrencies immediately, regardless of the high price.

FOMO psychology makes new investors lose.

Let us know Mr. NTTTri (cryptocurrency investor who lives in) Ho Chi Minh City) said it entered the market around the time Bitcoin was peaking. Fearful of missing out, Mr. Tri decided to buy Altcoins for higher profits. However, when the market fell, this investor’s account fell 300%.

Mr. Tuan said it is very important for investors to understand their risk appetite, capital and knowledge. Knowing who they are, investors can avoid the FOMO mentality.

“Don’t invest just because your friends are investing, and don’t compare that the other person earns 10 times, 20 times, but you earn little. Everyone has their own risk tolerance and their own product, ”commented Mr.

According to Dr. Ho Quoc Tuan, to make money in this market, you need to spend a lot of time and effort, and not just watch and then follow your friends invest.

“The crypto market, the NFT game, or any other market, you don’t have to just jump in and start making money. If you want to make money, you need to take effort and time to study carefully, ”concluded Mr. Tuan.

Not familiar with basic technical operations

According to Tran Dinh, CEO of the cryptocurrency investment and advisory firm Alpha True, the technical barrier is one of the first challenges when entering the market. “Technology is the first requirement for investors because they have to learn to create wallets, exchange money and understand blockchain. Those are the basic things to know, ”said Dinh.

Transactions on the blockchain platform require a high level of accuracy and security. One wrong operation can lead to huge loss of money. It is very easy for investors who are new to the market with little experience to go wrong. The technical problems that new users often face are transferring money to the wrong blockchain or revealing the security code to restore the wallet.

On November 23, investor LD Tay (living in Hanoi) in the Coin98 Insight group announced that he had mistakenly transferred a number of valuable GALA tokens. $ 60,000 in the smart contract code instead of the project’s wallet address. This amount is not yet refundable.

In addition, the careful storage of the security code for restoring e-wallets is a very important technical process for participants in the cryptocurrency market. However, some new investors ignore these cryptographic protection recommendations, allowing hackers to access and steal assets in the wallet.

Moving to the wrong address results in many investors losing money. Photo: Business Insider.

On November 19, a user named HLPthao, who lives in Hanoi city, announced that he had lost many NFT items stored in his digital wallet while not completing a transaction. Anh Huy, an expert who supports Ms. Thao’s case, said that investor disclosed the wallet recovery password because it was stored in a personal email.

According to the recommendations of the issuer of the digital wallet, this part of the cryptography must be carefully written down and kept and not disclosed to third parties. CNBC recommends that users can use tools like 1Password or Lastpass to keep the recovery code.

Neglect of security

Domestic investors often look for new, low-value tokens to invest in hopes of big gains. However, these cryptocurrencies are often not listed on a central exchange such as Binance or Kucoin. When trading on a decentralized, unsecured exchange, investors are exposed to many security risks and property theft.

On November 18, investor N.Nam said he had been embezzled by scammers with assets worth about VND 350 million in the Metamask wallet. This person suspects that his participation in IDO (first sale on a decentralized exchange) of some cryptocurrencies made it easier for hackers to penetrate and take over electronic wallets.

Users should not allow wallet access to decentralized exchanges.

In addition to inviting them to participate in IDO, sending a non-exchangeable amount of tokens is another trick used by hackers to force users to connect to a decentralized exchange. When the user clicks the link, the crook can interact with all the assets in the wallet.

According to Mr. Phan Huy, Basic Crypto Community Administrator for Newbies, new investors should start with centralized exchanges. In a decentralized exchange, users only have little capital and become familiar with the operation and operation of the platform and the digital wallet.

In addition, investors should use two phones for two different digital wallets. In particular, a wallet contains few assets that are used for trading on decentralized exchanges, which minimizes the risk of losing money.

According to CNBC, decentralized exchanges do not have an asset management agent, so there is a high risk of being attacked by hackers. In addition, hackers can exploit vulnerabilities in the platform protocol to take over investors’ assets. In addition, users should immediately revoke the platform’s access to the wallet after a transaction.