How to Stay Safe in Crypto

Crypto scams. They can be quite tricky to identify whether you're a beginner or an experienced trader in the crypto space. The type of scam we will be diving into is a rug pull. A rug pull is a type of scam where a coin is hyped up, the price is pumped, only for the founders to swiftly sell off their holdings and run away with the profits, leaving everyone else holding worthless coins.

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So let's take a look at how you can stay safe when finding coins to invest in.

There are many checks you can do to see if a coin is legit. Firstly, check the market cap of the coin. If it’s relatively new, with a couple of thousand or even a couple of million in market cap, I would be very cautious of it. Even if it is a legit coin, there’s a very real chance that it could fail and I wouldn’t want to invest in something like that. These types of investments are very speculative, and there'd need to be some serious reasons for the coin to be worth investing in.

On the other hand, if it has a decent market cap, say 100 million or over, it can be pretty safe to say that the crypto is legit. This generally suggests that it has some backing, and it’s pretty hard for a scam to get that big. If you think about it, if I was running a scam coin, I would be happy to take my money and run at a couple hundred thousand let alone a couple hundred million.

Another thing to do is to check out the coin's website. Usually, you can find out if they have a dedicated team behind it (or more worryingly, discover the lack of a team behind it). If there are obvious spelling mistakes, or if they make a reassurance that they are legitimate, be very careful.

A legit coin would have no reason to reassure investors of its trustworthiness.

Although, the best thing to do is stick to well-established coins. Coins like Bitcoin and Ethereum have solid teams and investors behind them, and rug pulls simply won't happen in these coins.

These are just a few things that I would do, and I’m sure there are many other ways to check if a coin is legit.

If you're ready to get into crypto, consider using Coinspot with the link below:

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