Crypto is back in the spotlight after a rocky couple of years. Prices are climbing again, thanks to things like U.S.-based spot ETFs hitting the market and new rules taking shape.
Even big players in Canada are warming up; a KPMG study showed 22% more financial providers offered crypto services in 2023 than in 2021.
It’s easy to see the appeal. Crypto is borderless, fast, and doesn’t need a middleman like a bank. That means lower fees and quicker transactions. And, of course, the chance for big profits draws investors who want to diversify their portfolios or make short-term gains.
But it’s important to remember that with those big potential rewards come big risks.
The Risks Nobody Talks About
The same features that make crypto exciting also make it dangerous. Prices can skyrocket overnight and crash just as fast. And because it’s decentralized and not tightly regulated, scams are everywhere.
Some common scams to watch for:
- Rug Pulls: A flashy new project takes your money, then vanishes.
- Fake ICOs: Professional-looking sites promise the next big coin, but you’re left with nothing.
If you’re trading in the United States, make sure the platform is registered with the Securities and Exchange Commission (SEC) or your provincial regulator.
If you don’t, you might have zero protection if things go wrong, and once that money’s gone, it’s gone.
How to Play Smartly With Crypto
Crypto isn’t “bad.” It’s just not a one-size-fits-all investment. Before you jump in, check three things:
- Does it fit your risk tolerance?
- Is the platform you’re using registered and safe?
- Do you actually understand what you’re investing in?
Crypto experts call this “doing your own research”, DYOR for short. It’s not just a catchphrase; it’s how you avoid getting burned.
At the end of the day, crypto can be an exciting way to diversify your portfolio. But it’s not magic money, and it’s definitely not risk-free. Start small, learn the basics, and only invest what you can afford to lose.
