How to Stay Safe While Using Crypto Trading Bots

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In search of fabulous crypto returns, one can already find countless entries on Google for quite some time. Many of them also promise users enormous profits within a very short time.

How to Stay Safe While Using Crypto Trading Bots

So-called Bitcoin bots can be found quite often nowadays. They lure customers with high returns, but are these offers credible or merely scam like numerous other bait-and-switch offers? We got to the bottom of the matter and analyzed whether an investment can be justified.

What Are Bitcoin Bots?

If you scroll through the web, advertisements for so-called Bitcoin bots appear from time to time. These promise users that a sophisticated trading system can generate massive profits for users.

There is also often talk of long waiting lists for customers – so potential users seem to be lining up for this offer.

Trading cryptocurrencies such as Bitcoin is in some ways similar to the activity on regular, already established financial markets. To trade successfully, a private individual would have to have enormously extensive knowledge of the matter and have already been active on the market for quite some time.

In contrast to these qualifications, Bitcoin bots offer a supposed alternative. An automated trading bot, processes enormous amounts of data within a short time and is able to make profitable trades through a certain algorithm.

Basically, one invests in an automated trading bot according to the manufacturers. This is able to recognize trends in the market and convert them to the advantage of customers. A similar system of automated trading can also be found in the real economy.

In most cases, such offers are rather shady. Above all, the often utopian high returns seem quite dubious from the point of view of a neutral third party. In particular, testimonials that tell of having quit their jobs and now living off the Bitcoin bot sometimes seem exceedingly dubious.

How Do Bitcoin Bots Work?

In trustworthy offerings such as the Binance bot, for example, the bot is there to buy at the exact right moments when most of the market is selling. It is able to trade anti-cyclically and thus recognize and exploit profitable situations on the market.

Bitcoin bots are based on the pump and dump principle. Unlike regular financial markets, where such practices are prohibited, the bot can trade profitably on the crypto exchanges.

Are They Trustworthy?

With regard to these offers, it is necessary to be exceedingly cautious. If an offer seems too good to be true, then in most cases it is.

Although we found numerous positive reviews and experiences on the first page when researching this topic on Google, these can be questionable. Especially the fact that most of these sites also advertise Bitcoin bots at the same time seems a bit strange.

From the consumer’s point of view, it is therefore extremely important to inform oneself thoroughly before making an investment. The first alarm bells should already ring in case of concrete, utopian profits.

Why would a developer give such a profitable product to third parties? Why would anyone want to share a perfect Bitcoin bot with others? Pure charity is probably not behind it.

Deposits as Primary Goal

Rather, the operators of such sites are interested in collecting capital from new users. Between the registration on these dubious sides and the deposit as little time as possible is to pass.

Immediately after you have registered, you should deposit money – after all, you will receive much more than you have deposited.

Compared with respectable enterprises, which advise the customer and with questions advisory to the side stand, here it’s not exactly that case. Since the business model of the providers is based on getting more and more customers to pay in, they are dependent on getting more and more users.

Ultimately, these providers probably work on a commission basis and receive money when customers register through them. There are now countless reports of failures with these providers.

For example, numerous customers have been told that a payout is currently not possible. Rather, one would first have to deposit more money to be able to pay out his first deposit.

Dubious Business Practices

The business practices are extremely dubious and definitely not legitimate. When choosing your provider, you should therefore also pay attention to a correct imprint. Every reputable company has an adequate imprint on its homepage, which must meet certain legal standards.

However, numerous Bitcoin bot sites do not provide any information about the associated companies. This, of course, makes the enforcement of legal claims enormously difficult. Accordingly, one should keep the greatest possible distance from such providers.

On top of that, in most cases, it is not clear how exactly such trading bots actually work. Often, the fabulous profits are mentioned and reference is made to the sophisticated mode of operation. Plus, there is also no further information about the developers of these bots.

Conclusion about Bitcoin Bots

As already presented, Bitcoin bots aim at the desire of many people to be able to earn money quickly and easily. Through automated trading bots, enormous profits can be generated – although only under the right circumstances.

However, the whole thing has little to do with classic trading with cryptocurrencies. Where the money is located after the deposit with one of these providers is not visible at any time. Moreover, there are major concerns about the legitimacy of the providers and their payout practices.

From our point of view, the only right thing to do is find the right trading bot. Remember that you’re investing your own money with software, which uses your guidelines to create profits for you.

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Lucy Bennett

Lucy Bennett is a Contributing Editor at iLounge. She has been writing about Apple and technology for over six years. Prior to joining iLounge, Lucy worked as a writer for several online publications.