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Bitcoin set to hit $60k as Joe Biden's stimulus package is passed – be aware of scams – Express


Bitcoin made headlines in recent months as its price skyrocketed to over $50,000 (over £36,000) per coin. While Bitcoin saw an unprecedented rise, it may still climb higher in light of actions taken by the U.S. House of Representatives which could have global ramifications.

“Bitcoin, of course, cannot simply be printed. Indeed, it is living up to its reputation as ‘digital gold.’ Like the safe-haven precious metal, it’s widely accepted as being a store of value, a medium of exchange, and is valued for its scarcity.

“There’s also some concern that the relief plan will trigger longer-term inflation.

“In addition, others have suggested stimulus checks could be used by recipients to invest in cryptocurrencies for the first time or expand their existing crypto portfolios.”

There is some evidence which shows this prediction could become reality over the coming weeks.

Recently, Voyager Digital, a crypto trading platform with over 600,000 verified users, conducted an investor survey of 1,385 retail investment respondents taken at the end of February.

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The sentiment from this survey showed despite Bitcoin’s recent correction (a sudden drop in it’s price) seen in February, investors remain bullish on its prospects for March and beyond, with the following key findings being revealed:

  • Investors expect to see Bitcoin’s price hit between $51,000 and $60,000 by the end of the March
  • Only one in five investors (21.5 percent) believe Bitcoin is currently in “bubble territory”
  • eight out of 10 investors plan to buy more Bitcoin in March
  • An investor “bearish / bullish scale” recorded eight out of 10 (one being bearish / 10 being bullish) over the next six months, the same score was given to the next 12 months
  • The crypto-asset investors are most bullish on is Cardano (31.8 percent), ahead of Bitcoin (22.2 percent), followed by Ethereum (12.2 percent)
  • In the next bear market, the majority of investors expect Bitcoin to fall between 20 and 40 percent
  • When asked which was the greatest store of value, Bitcoin and other digital assets (60 percent) surpassed precious metals (eight percent), equities (six percent) and top-tier government bonds (one percent)
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However, as Bitcoin momentum rises investors have been reminded of the risks associated with cryptocurrencies, especially as people may start looking for the “next” Bitcoin.

On this, Erica Stanford, the Founder of the Crypto Curry Club and author of Crypto Wars: Faked Deaths, Missing Billions and Industry Disruption, reminded investors of the risks associated with acting without conducting due diligence: “So whereas in the ICO/initial coin offering era (mostly 2017 and early 2018) where crypto currencies were just produced out of thin air, then people could literally copy open source code, decide how many tokens they wanted to create, what value they wanted to give to them, build a template website to promote them, give them a random name and sell them.

“People would buy them believing vague claims that the currency was going to do whatever vague claim they made because it was a crypto currency built on blockchain. i.e. people believed the hype and people sold into that. Those were somewhere between opportunistic and scams. Now the scams have to be cleverer.

“Now the main trend in the scams is that the ‘crypto’ scams don’t even use crypto.

“The scammers play off people’s desire to get rich and to make the same returns that early crypto investors made. So the scams are more ponzi style, i.e. they say invest in this crypto mining set up (the way crypto currencies are produced) and we’ll mine them for you so you get guaranteed returns.

“Except there is no mining equipment, it’s just a Ponzi scheme.

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“Or they say they have a trading bot, they get people to give them their money to trade using their trading bot and promise or guarantee totally unsustainable returns.

“Except the trading bot doesn’t exist, it’s a ponzi, they take people’s money and pay out for as long as they can. Or they promise investment strategies – same thing. Take the money and pay out, the amazing investment strategy is never there. So most of the crypto scams now are really just playing off the hype and hopes around the technology rather than scams that are actually crypto related themselves.”

Erica went on to highlight some of the suspicious elements investors should be looking out for to recognise cryptocurrency scams: “Where there is no cryptocurrency, as was the case with OneCoin, made famous by the Missing Cryptoqueen podcast series.

“There are typically general, vague claims made but no specific details. For example, scams might say things like they’re using a new blockchain or the best blockchain platform, or a new cryptocurrency that’s better than Bitcoin or that they’re using arbitrage trading or a trading bot to trade crypto, but don’t give any details of how they’re doing that or what their tech is built on.

“It’s just words. With a real crypto project,they’re generally run by real techy people who will give all the details of which blockchain protocol they’re building on and will share details of their Github or share details of their tech or code publicly so that anyone will be able to check.”

Typically, new cryptocurrenncies are issued with “white papers”, a document which covers the problem that the project is attempting to solve and details on how their product is designed and works.

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These are usually long and detailed documents but even here Erica issued a warning: “I’d be careful of referencing whitepapers, as with scams, more than one has literally copied other projects’ whitepapers word for word or made other claims that were totally unsubstantiated, i.e. if it’s a scam, they will say what they want without worrying about being found out.

“The only real way to check is by looking at their code and if there are no details shown but great claims made, that’s when one should get nervous.

“Scams will even create whole faked social media personas and linkedin profiles etc so you do have to be quite thorough to check. The most obvious scams are the ones that offer really high returns and will often say the returns are guaranteed – i.e. they will say that investors will get crazy amounts such as one percent a day, i.e. too good to be true claims, which is illegal and impossible to guarantee anyhow.

“But basically if claims are made about returns, especially guaranteeing or promising returns, typically it could be a scam. Also scams will often offer high rewards to their promoters and will try and avoid targeting the crypto community. Not to say that multi-level marketing or network marketing projects are always a scam- but certainly when combined with the other buzzword that is crypto, one has to be very cautious at best.

“There is no industry kitemark or any standard yet, unfortunately. This would really help.”

Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to personal.finance@reachplc.com. 





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