Over the past decade, cryptocurrency has been all the rage. It all started with Bitcoin, which was created back in 2008. However, since then, the number of cryptocurrencies has grown significantly, as have the ways that investors can purchase these assets.
Cryptocurrency was initially met with skeptical eyes across the finance community; however, in more recent years, many notable investors have gotten onboard with the crypto craze. Investors considering adding cryptocurrency to their portfolios should familiarize themselves with cryptocurrency, its risks, and what can be done in the event of crypto fraud or crypto hacking.
What Are Cryptocurrencies?
Cryptocurrency is a digital currency that is backed by a complex algorithm making it nearly impossible to counterfeit. However, cryptocurrency is not tied to any financial resource, which is why so many were skeptical of the asset class initially.
How Can Investors Purchase Cryptocurrency?
At first, the only way to buy cryptocurrency was by creating a digital “wallet” and adding the funds through one of only a few cryptocurrency exchanges. However, over time, more and more reputable brokerage firms began offering crypto assets as an option for investors. Thus, today, you can buy Bitcoin, Ethereum, Dogecoin and many other cryptocurrencies through Robinhood, Fidelity, Ameritrade, Charles Schwab and dozens of other firms.
Investor Concerns Over Cryptocurrency
Despite the fact that cryptocurrency’s popularity has exploded, little has been done to address the unique risks these assets present to investors. Perhaps the most known risk of crypto investing is volatility. Cryptocurrencies are extremely volatile. It is not unheard of for Bitcoin to move more than ten percent in a single day. Thus, investment advisors should only recommend crypto assets to investors who are looking to increase their portfolio’s beta value or total exposure to volatility.
Additionally, there have been recent reports of crypto hacking where cybercriminals hack into a crypto exchange and essentially steal accountholders’ cryptocurrency. Just last month, Crypto.com admitted that a hacker was able to bilk investors of $30 million in crypto assets. In this case, the company made it right with investors by reimbursing them for their losses. However, this isn’t always going to be the case.
Crypto fraud raises unique concerns for investors. Because cryptocurrency is not regulated by the federal government, there are no standard procedures victims can go through to recover their funds. Thus, those who were the victim of a crypto hack will likely need to reach out to a Texas securities fraud lawyer for assistance.
Have You Been the Victim of a Cryptocurrency Scam?
If you recently lost money on a cryptocurrency investment, either due to a broker’s recommendation or hacking event, reach out to the dedicated Texas cryptocurrency lawyers at the Forman Law Firm, P.C. At the Forman Law Firm, we represent aggrieved investors who lost money due to no fault of their own, helping them recover their assets and hold those responsible for their losses accountable. To learn more, and to schedule a free consultation, reach out to the Forman Law Firm, P.C. at 512-306-8188 today. You can also reach us through our online contact form.