Remember the boy that cried wolf? There’s no better example of it than with trading, speculating, investing, or, whatever you call it, on crypto. To every Ying, there’s a Yang. In other words, for every moan about a crypto that’s borne out of inaccuracy, there’s some space cadet talking about going to the moon and Lambos. Sigh.

What we forget about trading on cryptos is that we are in a time of the wild, wild west. The volatility is impressive – huge peaks and dips that makes n00bs jump out at the first signs of “crypto death”.  Embrace the volatility!

Guess what? There’s bigger worries for any crypto investor, like how we recently pointed out how we believe Ethereum will be the first big alt coin to fall. However, in general, there’s other concerns you should have while crypto trading, such as:

a. Bank account closure

You’d rightly think to yourself, “Why would a bank care about where I withdraw my money to AND/OR where I receive it from. I mean, after all, if I pay my taxes, what’s the problem?

Bank closure on withdrawing/receiving money from a crypto exchange is a real threat. I originally started to worry about this when I pulled 1/2 my crypto investments from eToro to put on to an exchange (I’ll discuss why I did this another time), but pretty much straight after doing that, my friend sent me articles relating to bank accounts being closed.

After reading a few of these articles, I decided to make a small withdrawal from exchange back to my bank. All went well, but it didn’t satisfy my worries as this was early December when it started picking up momentum, thus, the risks of returning funds to bank greatly increased.

So, I popped to my local bank to talk to the manager and see what they would say – straight from the horses mouth, so to speak. Unfortunately, after explaining what I was doing, I realised I was hitting a brick wall. Not for the fact she didn’t want to help, but because it just seems that local branches are not kept up to speed with what’s happening in the world, so I had to wait a week so that she could contact those higher up in the food chain and then get back to me.

A long story short, on my return to the bank to discuss, they could not give me a definitive answer. And while she really wanted to help, she stated that due to money laundering laws and their internal practices, nothing could be discussed. Wow, thanks! So, I came out feeling like a criminal.

I couldn’t leave it there, as now was a real and apparent threat to any money returned (especially with the numbers I was looking at), so I contacted the FCA (Financial Conduct Authority) to discuss this with them and see what they thought, advise me on when it came to accounts being closed on returning funds.

The FCA were more helpful and had 2 key points for me. 1) They could not see anything wrong with what I was doing. No issues that flagged up for them that I was doing something I shouldn’t. However, 2) they also stated that my bank is a company and they can do whatever they want, for whatever reason, when it comes to closing my bank account, and yes, that also means freezing my funds!

However, it doesn’t mean I cannot get these funds back and the FCA gave me a reference number to follow up my issue with them if this happened, as there are procedures to follow that I’d basically have to show my trading accounts, thus showing the flow of money back and forth.

In hindsight, I should have maybe opened a new account with a completely new bank to at least safe guard my savings from also being frozen.

If you find yourself in the same position as me, you still have another option. The exchange I used was Bitstamp and they also allow you to withdraw your funds via gold. I know, that sounds even more dodgy, doesn’t it?! It also means, I’m sure there will be a number of people that withdraw via gold, to then sell the gold for cash, thus, trying to evade tax. That of course, I would not do, but I may go down the gold route, so I can then bring the funds back from the sale of gold to my account.

Please, don’t just take my word for bank account closures or scoff at this advice; do your own research – Google something like “{MY BANK NAME} account closed when receiving funds from {EXCHANGE I USE}. A quick Google shows you this.

b. Trading it as a CFD

Pet hate of mine is this one. Before the 3rd September 2017, any open positions on eToro were CFD trades in crypto and not actually purchases of the physical coin. After that date this all changed. However, there have been ongoing grievances from people at times of volatility, as trading closes for crypto, thus, new people cannot trade it.

Unfortunately, this has created new social spam on eToro with those that have open positions shouting, “copy me, I have 100% invested in XRP”, thus, new people that couldn’t open a new position due to trading closed, would go ahead and copy someone.

What’s the issue with this? Well, if you’re just going to stay on eToro, it’s no big deal, but, if/when they finally bring out a crypto wallet, if you are copying a crypto trader, you will not be able to withdraw to another exchange and that’s because you have not purchased the physical coin, you simply have a CFD position on the coin.

In my experience; DO NOT DO THIS. I’ll write a separate article on why not to do this, another day, as there’s quite a few reasons not to do so.

c. Country regulatory clamp downs

This is going to be big in 2018 and the start of the year, this has proven to be the biggest of volatility knock on affects so far. Canada has been first to move for trading on international sites such as eToro – this is not a crypto clamp down, but on investing (how it’s done) in general.

However, South Korea and China look to be taking this forward first in 2018 and I expect this to slowly, but surely, turn on regulations from around the world.

d. Extreme volatility

As mentioned at the beginning of this, volatility is your friend and not your enemy. Embrace it. Truly, embrace it. If you wanted a boring single or barely double digit yearly gains, trade on the main stock markets like FTSE 100, but where’s the fun in that?

As of writing this article (and we will also follow up on this in a later article), the best thing to do if in the red is HOLD. ALL the large cryptos have GAINED in the previous 12 months and there’s no sign of this going in the other direction, long term. Don’t try and be The Wolf of Wall Street, you are going to get your fingers burnt. Hold and stay calm.

e. Understanding substance over hype

Lastly, but not least, understand a crypto/blockchain with some substance, rather than hype. Dogecoin anyone? Currently worth BILLIONS, but hasn’t been developed on for years and was only made out of a ‘joke’! A JOKE! Yet, here we are, looking at a joke coin with billions as its market cap. The world has gone insane. However, I also think these coins, like how I discussed the ERC20 coins in this article, they’ll be dying off soon enough. I’m not saying not to invest in these “sh*t coins”, but don’t be the last one without a seat when the music stop.

 

CryptoCoinPrediction.com is not responsible for the article’s content or accuracy and may not share the author’s views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest. 

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