Top 5 Cryptocurrency Myths Every Trader Should Know

The popularity of cryptocurrency has given traders an alternative trading option with complete security. It is important to understand how cryptocurrencies work as there are several myths you must know about them.

Cryptocurrencies are simply digital currencies that can be used for making online payments and trading. These are digital assets that you can invest in to get future benefits when the value of cryptocurrency increases.

There are several online crypto exchange platforms that help you to earn daily profits by trading in cryptocurrency. Click here to open your free account and start making daily profits now.

Cryptocurrency myths every trader should know

1. Bitcoin is the only cryptocurrency for earning profits

There are several cryptocurrencies available for trading and Bitcoin is not the only cryptocurrency for earning profits. No doubt, Bitcoin is the oldest cryptocurrency with the highest monetary value but there are plenty of other cryptocurrencies like Ethereum, Dogecoin, Tether, Binance, and many more that have a high monetary value.

Bitcoin is amongst the top digital asset that has the highest liquidity ratio i.e., you can easily sell it anytime at market value in exchange for FIAT currency but there are several other cryptocurrencies with high liquidity ratios and are widely used by traders to earn profits by trading in a cryptocurrency other than Bitcoins.

Cryptocurrencies are gaining the attention of every trader, and many believe that only trading in Bitcoins will make their profits. Bitcoin being the most valuable cryptocurrency doesn’t mean that it will help you earn the highest profits. You can make much more profits from trading in other cryptocurrencies as well.

2. Cryptocurrency is an illegal digital currency

Many traders believe that cryptocurrency is an illegal digital currency and is only used to make illegal transactions. This is the reason why many traders avoid trading in cryptocurrency. This is just a myth, and the use of cryptocurrency for trading is completely legal in almost every country.

There are several companies that have started accepting cryptocurrencies as a mode of payment. Now you can use cryptocurrencies to buy branded clothes, luxurious cars, paying bills, and much more. Somewhere it’s true that many illegal activities made payments in cryptocurrencies.

The reason being cryptocurrency is a decentralized currency, i.e., banks and other financial institutions cannot monitor your transaction. Hence it was used to make illegal payments but considering cryptocurrencies as an illegal digital currency is a huge mistake.

Even governments of several countries have legalized the use of cryptocurrency to make transactions, and you can safely trade in cryptocurrency without any risk.

3. Cryptocurrencies can be easily hacked

This is amongst the biggest myths of cryptocurrency that it can be easily hacked. There has been a misconception in novice traders that crypto wallets can be easily hacked. Hence trading in cryptocurrency is not a good option.

Traders who are trading in cryptocurrency and have a knowledge of cryptocurrency can vouch for it being one of the most secure and safe modes of making online payments. You don’t have to worry about your cryptocurrency getting hacked by hackers.

It’s true that few crypto exchange platforms have faced cyber attacks by hackers, but now with the use of advanced software hacking your digital currency is not possible. The advancement in blockchain ensures your cryptocurrency is stored safely in your crypto wallets protected with encrypted passwords.

If you want to start trading in cryptocurrency and are worried about security and privacy, then consider trading from a reputable popular crypto exchange that offers optimal security from hackers and cyber attacks.

4. Crypto based exchanges don’t have to pay tax

Another misconception in a crypto environment is that crypto-based wallets are free from tax. This is just a myth and just false information believed by a few traders. Every company has to pay taxes irrespective of the nature of business or service they are offering whether online or offline.

You might have to show proof of your earnings and file income tax like a responsible citizen and pay your yearly taxes. There aren’t fixed specific rules to file for income tax for a crypto-based exchange, but you can take help from the internet to research the present tax rules or consult a tax consultant for in-depth insights.

There have been constant modifications in tax rules by the IRS regarding income from cryptocurrency. You might have to pay plenty of charges and fines on unreported tax by the crypto exchange platforms on the revenue they generate from cryptocurrency. Crypto traders must be aware of these tax rules before they start trading in cryptocurrency.

5. Future predictions that Cryptocurrencies might be banned

You will find many traders making a future prediction about the high chances of cryptocurrencies getting banned. This is another greatest myth, and Cryptocurrency getting banned all of sudden is nearly impossible. The primary reason being it holds the key to digital transfer of funds unlocking several possibilities of the current financial system.

Also, millions and millions of dollars have been invested in cryptocurrency by several traders and investors who will face huge losses if the government decides to ban cryptocurrency all of a sudden for no reason. Countries like the USA have a positive response towards the acceptance of cryptocurrency as a mode of transaction.

More and more people are still investing in cryptocurrency, and no doubt it will change the monetary system of the world by making a single currency with the same value worldwide. The number of crypto traders has been increasing every month with increasing popularity in cryptocurrency. All of these factors clearly indicate these digital currencies will not be banned anytime soon in the coming times.

The Bottom-line

These were some cryptocurrency myths every trader must know. There are plenty of other myths related to cryptocurrencies and believing all of them will be a huge mistake and stopping yourself from earning high profits from trading in cryptocurrency.

Traders who are already trading in cryptocurrency know these myths are just barriers to stop people from earning daily guaranteed profits. Before starting trading in cryptocurrency, have complete knowledge of cryptocurrencies and clear out every possible myth and misconception.