Simple insights on how to master the art of Bitcoin trading

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The Complete Guide to Bitcoin Scams

May 23, 2020 – Posted by Suraya Zainudin on Guides

As we speak, bitcoin market capitalization is hovering around $6.4 billion dollars. That’s a lot of money, and you better believe scammers know this and want a slice of that digital pie.

Whether you are a bitcoin newbie, or someone who have been torched before, you should keep yourself up to date with the latest scam attempts. This is the complete guide to existing bitcoin scams you should be aware off. Credit to Coin Republic for compiling some of the scams in this infographic as well as to CryptoCoinNews for keeping an updated Bitcoin Scams page.

1. Fake website scams

In January 2020, one Reddit user posted his experience after being scammed out of some bitcoins after accidentally using a fake website that imitated the cryptocurrency exchange service The website looks almost exactly like the actual website, except that it has a missing letter in the URL. ShapeShift was notified and posted a blog post about it to warn other users.

Scams involving fake websites like this is not an isolated incident. There were also fake websites for BitStamp, Bitcoin Foundation, and others.

These websites make money by stealing login information from users, or mislead users into sending funds into their wallets. Some even go further by taking Google advertisements!

Solution: Do not click from unverified sources, especially from emails to avoid phishing attempts. Always check for correct spelling and SSL certificate – i.e. URL begins with https.

2. Cheating scams

Found someone online who have bitcoin to sell, or accept payments for goods and services in bitcoin? You might be sending your money to scammers and may receive nothing in return. This is one of the oldest tricks in the book, yet it still happens on a surprisingly regular basis.

Scammers try to win your trust in many ways. In order to dupe you, some might send fake IDs or even impersonate a respected member of the local community.

There are many variants of cheating scams involving bitcoin, including:

‘Advertise with us’ scam, where scammers impersonate reputable bitcoin websites and email bitcoin users with advertising opportunities.

Bitcoin for sale scam, where scammers pretend to be both seller and a previous (satisfied) customer in order to mislead. To make the offer enticing, they usually offer bitcoin under market price.

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Pre-order mining equipment scam, where scammers collect money for equipment that never came.

Solution: Follow your instinct – if the deal is too good to be true, it probably is. Only use trusted companies or services, and make sure to always double check website URL and email address. When in doubt, contact customer support to confirm. When doing funds transfer locally, try to meet face-to-face or use reputable escrow services.

3. Ponzi (and MLM) scams

Ponzi scams are fairly easy to spot, no matter how professional the website looks. However, because scammers in elaborate Ponzi schemes know how to manipulate human greed and is great at giving sweet promises of easy money, it is easy for a person to be lured into it. Usually, bitcoin ponzi scams operate by:

1) over-promising ROI to the point of ridiculous
2) having an active recruitment scheme

There are many versions of ponzi scams involving bitcoin, but the most common – and most dangerous – are interest on bitcoin deposits scams and bitcoin mining groups scams.

Interest on bitcoin deposit scams operate by offering investors a fixed deposit-type arrangement. Investors are promised high returns on their deposits after a period of time. However, not only the promised returns will never come (or came in the beginning, but stops after a while), unlucky investors will also lose their bitcoin deposits. In 2020, 3000 investors suffered combined loss of HK$3 billion dollars in the MyCoin scandal. More recently in March 2020, 1000 investors lost NT$50 million after promised 250% returns on investment.

Bitcoin mining group scams, on the other hand, operate by offering investors the chance to ‘mine’ bitcoins without dealing with the hardware and maintenance required. Also called bitcoin cloud mining, these companies scam investors by promising fast and easy return on investment. While legitimate bitcoin mining groups do exist, there are very few left that can still turn a decent profit, if at all. They are best avoided altogether. Gavin Andresen even said that many bitcoin mining groups – even established ones with thousands of members – may be Ponzi scams after all because bitcoin mining is simply not sustainable in the long run.

On the same note, there are a lot of MLMs involving bitcoin as well. While not strictly scams per se, they do depend on ‘referral marketing’ and should be approached with caution.

Solution: Avoid anything that over promises. Legit investments will never ‘guarantee’ returns. Others’ testimonies are rarely reliable – some people don’t realise it until too late – so only invest if you are willing to lose the whole amount. Be skeptical of positive reviews of bitcoin companies online. Be extra wary of investment groups that appear cult-ish.

4. Phishing scams

One would assume that members of the bitcoin community are more tech-savvy than others and phishing scams would never work on us. However, phishing scams do and did happen – in December 2020, BitPay lost 1.8 million in bitcoin in a phishing attack. A quick check in Reddit reveals more recent phishing attacks – be especially cautious if you use any of the following services on a regular basis (this list is not exhaustive): Bitstamp, LocalBitcoins, Coinbase, and

Solution: Don’t click from unverified sources, including from emails. Always check for correct spelling and SSL certificate (ie: https)

5. App & Plugin Scams

This is relatively new and pretty scary development. Scammers have stepped up their game – there are now bitcoin scams that operate as apps and plugins.

In November 2020, the Bitcoin community was warned against a fake Localbitcoin app, available on Android (since taken down) that phished for bitcoins. (image credit to CoinDesk).

More recently, in March 2020, the Bitcoin community was urged to uninstall a Chrome add-on called ‘BitcoinWisdom Ads Remover’ which can steal bitcoins by replacing QR codes in popular exchanges with fake QR codes.

Solution: It’s hard to predict what kind of scam apps or plugins (or something else?) to appear next. The fake app had plenty of (fake) 5-star reviews, so we know that we can’t even trust Android Play Store ratings. Exercise extreme caution – to be safe than sorry, email customer support to verify that the app/plugin is indeed, theirs.

6. Bitcoin Authority Scams

This is one of the hardest scams to see through because the scammers appeared to have high authority among Bitcoin community members. For example, the digital currency exchange platform Cryptsy did not tell its users that it was allegedly hacked out of $6 million worth of bitcoin in 2020. Instead, they simply did not allow users to withdraw bitcoins and ignored support tickets. Before that, the community was shocked by the Mt Gox incident. It was a respected bitcoin exchange, until it suddenly disappeared without a trace, along with approximately 744,000 bitcoins.

More recently, the fake organisers of London Bitcoin Forum apparently got away with thousands of pounds in ticket and sponsor fees. The event, which was scheduled for 23-24 March 2020 promised a lively 2-day event featuring talks from prominent Bitcoin industry leaders, networking opportunities, presentations and much more. Many Bitcoin news websites, companies, and members of the public shared the event and made plans to attend it, until it was revealed as an elaborate scam. By this time, the website and Facebook page were taken down without notice or news. The only silver lining: this particular incident brought to light the lack of proper guidelines for bitcoin news reporting by major bitcoin news websites.

Solution (kind of): We would say ‘only use the services you trust’, but this advice is meaningless here. All of the above were trusted entities (at that point). However, you can reduce the risks. Divide your bitcoin storage across several wallets, or cold storage it. Practice a healthy level of skepticism over any news article and review you read. If the website has a history of sweeping stories under the carpet, proceed future news (especially involving money) with caution.


Bitcoin scams are not doing the Bitcoin image any favors. Is this the natural evolution of a decentralised currency such as bitcoin? So far, the lack of regulation for digital currencies as well as Bitcoin community’s preference to self-regulate is certainly making it easier for scammers to target bitcoin newcomers. It is unlikely that bitcoin scams will stop appearing, so our only hope is to keep ourselves updated and get digitally protected.

Do you have any other scams that we missed? Write to us at the comments section below.

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Bitcoin has changed the way we do business Online. In the past, Bitcoin was a little-known project in decentralized currency, and very few people outside of a niche circle had an understanding of how it worked or what its potential was.

In 2020, Bitcoin had grown over 1,000 percent, and many new businesses took advantage of this by accepting Bitcoin for their operations or implementing the cryptocurrency into their business model.

This soon grabbed the attention of the mainstream media and investors, who began to see the potential of this cryptocurrency as an asset that would have a solid place in the future of our society, skyrocketing the value even further.

Whether you feel that Bitcoin is currently overvalued or that has only scratched the surface as to how far it will go, investing in Bitcoin as an asset class is not a matter of if but when.

There are many ways in which you are able to invest in Bitcoin. You don’t necessarily need to have a lot of money to throw down in order to make excellent returns. With some of these methods, you don’t need to put down any money at all.

Everyone is able to invest in Bitcoin, regardless of your socioeconomic class, professional, age, or nationality. Bitcoin is available for all, and there has never been a better time to take advantage of the coming-of-age of this new form of digital currency.

Tips for Bitcoin Trading Like a Pro

Because it’s high time you got on that train. Bitcoin trading is not for the faint of heart. A statement that gets tossed around fairly often. Novice traders should not apply. These things are heard throughout bitcoin and altcoin communities.

Because it’s high time you got on that train.

Bitcoin trading is not for the faint of heart. A statement that gets tossed around fairly often. Novice traders should not apply. These things are heard throughout bitcoin and altcoin communities, and because of them- a lot of people have missed out on a lot of profit.

In 2020, bitcoin was in almost every headline, splashed against every front page. Millionaires were made overnight. To think that each and every one of these investors knew what they were doing is indeed short-sighted. If not laughable. As the markets develop, so do trading platforms, options and styles. Which can actually serve to make it a new mans game.

Unfortunately, (or fortunately, depending on which view you have) being a seasoned trader can actually serve to cause quite a few problems for an investor. Relying on tactics and habits that may serve you well in other markets, will most definitely not work with bitcoin. Bitcoin trading platforms, like, can be a godsend for new and seasoned investors alike, but what really makes a difference is all in how you play the game, not necessarily who you play it with.

1. Create clear targets, and don’t stray from them

Make sure that you set a clear target for buying and selling. While bitcoin has shown, time and time again, that it is a sure thing- it has yet to help stifle the incredible volatility within the market. When trading with bitcoin, have a clear idea of when you plan on letting that coin go. Getting greedy and waiting for the coin to hit the absolute max, you may just be setting yourself up for selling during a dump.

Bitcoin can change the value in the extreme, within just a matter of hours. A 2-3% loss on NASDAQ is considered some pretty extreme fluctuation. Where it’s not unusual to see bitcoin pump or dump by upwards of 80% in just a matter of hours. Don’t continue to hold out once you’ve hit your target, even if the price still seems to be climbing. Going for small, short-term and relatable gains will get you farther than risky business ever will.

2. Choose a platform designed with you in mind

If you’re a new investor, a trading platform is a must. As a seasoned bitcoin investor, it’s not unheard of to juggle several trading platforms all at once. This offers the investor quite a few advantages. Choosing a good exchange platform that offers tools like portfolio management, fiat to crypto purchases, and live, multi-coin information can help a novice investor learn market trends and behavior, from a safer position. There’s also Q8 Trade which is a known and established broker that offers cryptocurrency trading via CFDs or contract for difference.

Choosing to have at least two crypto-wallets, a “hot wallet” and cold storage, is perhaps the most important thing any bitcoin trader can do. Some platforms will offer both wallets within one streamlined and easily navigable system. Hot wallets are ones that are connected to the internet. This is where any savvy trader keeps the amount of bitcoin that they are willing to trade- and lose. Cold storage refers to offline accounts, in which the bitcoin is stored, but cannot be readily traded.

3. Understand the market

What makes the bitcoin market so delightfully volatile is two-fold. The decentralization of markets coupled with the finite resource can give investors a better idea of inflation rates and market trends. Decentralization offers investors the ability to trade without artificial inflation of the middlemen. This means that there is no go-between within a bitcoin market that can arbitrarily adjust price based on futures or predictions. However, without this centralization, there is also an obvious lack of oversight. Meaning that market trends can be swayed greatly by “whales”. Whales are the top tier of bitcoin investors, holding a vast majority of the bitcoin in existence.

The finite amount of bitcoin in existence makes the market predictions that much more reliable. Knowing exactly how much bitcoin is in circulation, how much bitcoin exists, and how much bitcoin will exist can help to give investors an idea of how supply and demand may move around market values.

4. Don’t let your ego override your coin

This is perhaps where most seasoned investors go wrong. The habits they have formed that have become reliable to them in other markets, rarely apply in the same way to bitcoin. Don’t rely on standard news sources to try and get an inside track on bitcoin. Even less “credible” trading news sources like Reddit and twitter can serve to make an investor question what they’re seeing. So much of the traditional press is running off of the hard bias of larger corporations. Other traders are thrilled to naysay and become your standard troll.

Don’t listen to these outside sources. Stick to your guns and your plan. Outside sources will generally give you two things: a false sense of security, or a false sense of doubt. Learn your trends by watching them happen in real-time. Don’t jump on pump trends just to make sure you’re holding the coin of the hour. Bide your time, and the coin you have. Buy low, and don’t worry about what anyone else is saying.

How to trade bitcoin

Get to grips with the basics of how to trade bitcoin with our step-by-step guide.

Interested in bitcoin trading with IG?

As the world’s first cryptocurrency, many see bitcoin as the most likely contender to mount a serious challenge to traditional (or ‘fiat’) currencies. Considering its price history, though, it looks like there’s going to be lot of volatility along the way.

You can start trading bitcoin by following these four steps:

Ways to deal bitcoin

There are two ways to deal bitcoin: buy the cryptocurrency itself in the hope of selling it on at a profit, or speculate on its value without ever owning the token. The latter is how CFDs work.

A CFD enables you to trade a contract based on prices in the underlying market. It is a leveraged product, meaning you can put down a small initial deposit and still gain the exposure of a much larger position. This can magnify your profits, though it can have the same effect on your losses.

Do I need to use an exchange to trade bitcoin?

When you trade bitcoin CFDs, you never interact directly with an exchange. Instead, you trade on our buy and sell prices, which we source from a number of exchanges on your behalf. In order to take a position on bitcoin’s price, then, all you need is an IG trading account.

Bitcoin exchanges work the same way as traditional exchanges, enabling investors to buy the cryptocurrency from or sell it to one another. But there are a number of advantages to cutting them out of the equation entirely:

  • They lack proper regulation, public records and the infrastructure needed to respond quickly to support requests
  • Their matching engines and servers are unreliable, which can result in the suspension of markets or reduced execution accuracy
  • They impose fees and restrictions on funding and withdrawing from your exchange account, while accounts themselves can take days to acquire

By trading bitcoin CFDs, you also gain significantly improved liquidity at your chosen touch price. When you buy and sell direct from the exchange, you generally have to accept multiple prices in order to complete your order.

What moves bitcoin’s price?

While bitcoin’s volatility makes the cryptocurrency an attractive opportunity, it also makes it a particularly risky market to speculate on. Its price can shift significantly and suddenly – and since the bitcoin market operates around the clock, this is liable to happen any time of day.

As a decentralised currency, bitcoin is free from many of the economic and political concerns which affect traditional currencies. But as a market still in its adolescence, there is a lot of uncertainty entirely unique to the cryptocurrency.

Any one of the following factors could have a sudden and significant impact on its price, and as such you need to learn to navigate the risks they may open up.

Bitcoin supply

There may be a finite supply of bitcoins – 21 million, all of which are expected to be mined by 2040 – but even so, availability fluctuates depending on the rate with which they enter the market, as well as the activity of those who hold them

BTC Market cap

The value of the bitcoin market – and how valuable it is perceived to be – both influence whether traders will look to get in on a surging opportunity, or short the latest bubble

Bad press

All currencies are affected by public perception, but no more so than bitcoin, whose security, value and longevity is in question even at the best of times

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