's up guys. It's graham here so as usual. I had another topic that that was planned to post today. But with everything going on along with some really advice spreading around the internet.

I decided. It was best to postpone that video so that we could talk about the catastrophic state of the cryptocurrency markets because with the collapse of tara. Luna celsius. Voyager digital.

Three euros capital and potentially many more i worry that most people are completely unprepared for what's about to happen and could wind up losing a lot of money if they're not taking the right precautions. Ahead of time in fact. This is something that i think is so serious that i want to go right into the video without any cheesy like button smashing or subscription requests. Unless of course you want to it's just going to be straight up information since most likely.

It is going to save you money if you are in any way involved in. Cryptocurrency so thank you guys so much and also big thank you to stmcom for sponsoring this video. But more on that later here's the thing. I've closely followed the cryptocurrency market here on the channel since early 2017.

When bitcoin had barely hit a thousand dollars back. Then we saw. The market increase by over two thousand percent. Altcoins and icos made multi millionaires in a week.

Dozens of crypto channels popped up. Where teenagers were touted as experts and then everything fell 90 to 99. But unlike those previous markets. Which were plagued by extreme volatility.

Rug pulls or brokerage hacks like bitfinex binance and the infamous mount gox today. We have an entirely new obstacle caused by poorly managed over leveraged companies who take risks with your money for the sake of generating slightly higher returns. And as we're just finding out this could be the tip of the iceberg places like celsius. Voyager and coin dcx have recently disabled withdrawals while the cryptocurrency hedge fund.

Three arrows capital is unable to repay their debts with prices continuing to fall this created almost like a domino effect where one falls onto the other which falls onto the other onto the other and with cryptocurrency prices continuing to fall. This could be the very beginning with mike novogratz. Calling for two thirds of those hedge funds to go to business. Unfortunately.

This presents a really disturbing problem for the entire industry with a completely flawed business model that should have never existed in the first place and if you're curious how this works along with what you could do to protect yourself. Here's what you need to know see when it comes to cryptocurrency you generally have two different types of business models. One is the exchange where you could buy and sell cryptocurrency usually for a small fee and from there you're free to do with it whatever you please honestly from a logistical standpoint. This business model isn't inherently complicated or risky since they're not taking on the liability of their customers.

But there is the danger that at the end of the day. You are at the mercy of that exchange going bankrupt. Getting hacked or otherwise. Losing your coins.

Because of their own negligence. And if you think that can't happen well it already has let's start with bankruptcy in 2014. One of the largest cryptocurrency exchanges mount gox went bankrupt after it was reported that 850 000. Bitcoins went missing eight years later customer reimbursement is still in limbo.

And it's highly unlikely they'll receive anything close to their full capital back quadruca cx also fell into bankruptcy in late 2018 after their founders suddenly passed away revealing a poorly mismanaged company with no financial bookkeeping. Along with bitgrail around the exact same time. But since cryptocurrency is not held at the same standard as the us dollar held within an fdic insured bank. Account customer funds are not protected.

And as a result everything is lost just recently this issue was brought back into the spotlight. When coinbase updated their terms of service to say that customer cryptocurrency assets could be considered the property of a bankruptcy estate. If such an event were to occur meaning. If they were to go out.

Basically you're out of luck. So even though. That's an unlikely worst case scenario. It's not impossible.

And that's something you need to accept the second you also have the risk of a hack. Unfortunately. This has become far too common within cryptocurrency exchanges and when you hold your coins on a platform. You open yourself up to the liability.

That your funds might not be entirely safe companies like mount gox kucoin binance. Bitfinix. Bitmart and coincheck were all victims of an attack. Where the company is not responsible for making.

Sure your coins are recovered and finally you have the risk of halted withdrawals. Where the money you thought you had access to is suddenly stuck for instance just recently binance temporarily halted bitcoin withdrawals. Because of severe network. Congestion celsius also halted withdrawals until indefinitely along with voyager and coinflex who may run out of liquidity in these circumstances.

Your money cannot be accessed. And you're at the complete mercy of the company to eventually bring it back without any guarantees and admittedly. This is what you sign up for the moment. You open up an account just take celsius for example their fine print says that you agree and acknowledge that you're exposed to the possibility that celsius may become unable to repay its obligations to you in part or in full in which case any digital assets in your celsius account that are not using the custody service may be at risk of partial or total loss and the fact is by signing up for almost any brokerage you are agreeing to their terms of service.

Which give them the unilateral right to almost do whatever they want now even though. This is generally standard language for almost every brokerage and the chance of this happening is rather unlikely. If you're using one of the more reputable companies. Nothing is impossible.

Although the second business model is something that i personally find way more concerning and that would be the lending platform. These are the companies that offer staking lending and borrowing services. Where a person can loan or give the company access to their funds in exchange for a predetermined return of capital anywhere between 1. And 15 and on the surface it appears as though it's a legitimate business model just give us your bitcoin.

We'll lend it out at 10 give you back eight percent and we profit two percent as the middleman. Easy money. And yeah. If it just stopped there that could be a reasonable option.

But unfortunately it doesn't because most of these companies are completely unregulated. Without any oversight. There is nothing insuring or stopping them from lending out your coins. Multiple times.

Over and as it turns out something. Like this is only sustainable until eventually it collapses and that's what we've begun to see for example. It would be no different than me investing a thousand dollars with cryptocrack for an eight percent return. But cryptocrack takes my thousand dollars.

And then uses that as collateral to get a loan from crypto bites for eight hundred dollars. Then cryptocrack could take that eight hundred dollars and use that as collateral to get a loan from crypto skunk for six hundred and forty dollars and this repeats. Until eventually cryptocrack is leveraged up ten to one even. Though.

It's highly irresponsible of the company. According to the fine print that's what you agreed to like with celsius. They say that they may lend sell pledge hypothecate assign invest to use commingle or otherwise dispose of assets and eligible digital assets that are not held in the custody wallet the same thing also applies to voyager digital with the customer being treated as an unsecured creditor and or the total loss of all customer cryptocurrency. If anything it's a lot scarier that this is the new reality.

We live in because it's not just another risky cryptocurrency going down after jake paul tweeted. About it. In which case. You probably should have known better instead.

It's an entire business model collapsing before our own eyes hidden in the fine print that no one ever really reads so in terms of my own thoughts on this and what you could do to protect yourself just consider this although before we go into that just like it's important to protect your investments. You can also protect the data that you share. Online all thanks to the sponsor of today's video samemindcom. The fact is we frequently give out our personal details.

Email. Address. Financial information and other sensitive data. On nearly every online.

Interaction. This type of data. Exposure could easily lead to potential threats like identity. Theft reputation.

Damage and even financial. Loss so sayminecom is there to help they let you discover how many and which companies hold your personal data decide which companies get to keep your data and which should no longer have it and easily exercise your data rights and your right to be forgotten by deleting your data from services. You no longer use plus. It's incredibly simple mine discovered that 90 of your digital footprint can be found in your email's inbox so mine compiles your footprint by analyzing subject lines and send your emails without collecting any of the emails content to determine just how many companies have your information sorts them all for you to see shows you what type of data you share and then i could send reclaim requests to companies to erase that data done directly from your emails.

Inbox for me. I've been concerned about the growing number of data breaches every year that's why it's more important than ever to maintain digital privacy in a way that benefits both you and the company now seriously. I had almost 200 companies holding my data. I got to see exactly what they have on file and the entire process was a few clicks.

That's why if you're interested in signing up or learning. More you can feel free to use the link down. Below in the description or go to sameminecom to get started. Today.

So. Thank you guys so much and with that said. Let's get back to the video all right so in terms of how you could protect your cryptocurrency investments first the most obvious from all of them not your keys not your coins. I know we've all heard this phrase non stop.

But most people still don't follow it and if you're a buy and hold investor like myself this needs to be something you take very seriously. The fact is even though cryptocurrencies could be highly volatile and could very well be worth nothing a year from now once you buy them from an exchange no matter. What happens they still belong to you and to ensure that nothing changes that you have to transfer them to something that you control like your own cold storage. This would completely solve the problem of my crypto is locked away.

It's gone forever. The company's going bankrupt and i have no idea if i'm ever going to get any of that money back and generally people tend to use either the trezor or ledger cold storage and if you have anything that you want to store to keep long term. This is probably the way you should go second only invest what you're willing to lose. I know this sounds like the most cliche investing advice ever but it's true given the uncertainty volatility.

Regulation and manipulation of a large portion of the market you should not be investing an amount where if you lost it you would be financially ruined. The truth is in order to think logically and make rational level headed decisions. You cannot let your emotions get the best of you and cause you to trade as though you're looking to buy the home next door to drink the only way to remain completely. Neutral is to invest in a mount where if it went to zero it would suck.

But you'll be okay from my experience after speaking with hundreds of people if you're losing sleep. Ca. N't concentrate or you panic at the sight of a 20 drop. You've invested too much.

And it's probably a good idea to lower the amount that you have in order to think objectively three never keep all of your eggs in one basket. I've said it before and i'll say it again you should never become too reliant on one exchange and you should never keep all of your crypto in one place just in case something happens i personally use five different exchanges with varying amounts in each and then i eventually move it over to cold storage once the money settles that way if one exchange is unavailable. Something happens one of them is hacked or aliens invade the world while tick tock overtakes youtube. I have plenty to fall back on and so far that's worked well in fact.

I would highly recommend that you take the exact same approach try a little bit of everything. See which exchanges. You enjoy the most and never hold cryptocurrency on a platform that you're not comfortable. Risking and finally when it comes to cryptocurrency only invest a small portion of your portfolio like i know it's tempting to want to place your life savings into an investment that could potentially 10x in a year.

But realistically it's a bad idea in fact it's pretty stupid. I would personally say that you shouldn't have more than 10 to your net worth. In cryptocurrency. Unless you have an extremely high risk tolerance.

You make a lot of money you don't mind. The downsides or you're perfectly fine placing your financial future in the hands of gary gensler. The way. I see it cryptocurrency should be used as a way to further diversify into an untraditional asset class.

And that's it it should not be seen as a way to get rich fast or stick it to the system. But as a small part of your overall account it could make sense under the right conditions. When you plan to hold on to it long term that's why for myself. I hold less than five to eight percent of my entire net worth in cryptocurrency spread evenly throughout bitcoin and ethereum using multiple brokerages as a part of a well balanced portfolio.

I almost said well balanced breakfast. But uh that wouldn't make any sense. Anyway the way i see it the larger cryptocurrencies have a lot of potential and i think it could be worth a small amount of risk to be a part of the journey. But i've always invested an amount where if it goes to zero.

It would have no impact on my life whatsoever and sure it would suck i would be sad no one likes losing money although. I would be fine and life goes on and in my opinion. This is the approach that more people should be taking unfortunately. Though it makes me really worried when i see articles with headlines that talk about how more than a quarter of us.

Millennials plan to use crypto to fund retirement. Which is absolutely insane the way i see it it's no different than replacing crypto with lottery tickets because by blindly investing in an unproven asset. That's essentially what you're doing i might be an old man dinosaur at this point. But i just don't think.

It's worth the risk especially when there are other proven options out there that'll give you a similar return without the chance of losing everything and if you decide to invest just keep it a small amount relative to an already balanced portfolio. If you could do that responsibly well dollar cost averaging and over time then go for it otherwise you're probably better off just continuing to save investing as usual and no matter what subscribing and hitting the like button. If you haven't done that already so with that city guys. Thank you so much for watching also feel free to add me on instagram and don't forget that you can get your free stock with all the way up to a thousand.

Dollars when you sign up for publiccom. Gram down below. In the description. Because you may as well do that plus you could get all the way up to a hundred dollars in free crypto.

When you sign up for ftx us also down below in the description with the code gram you may as well do them both pretty much like free money great way to continue diversifying thank you so much for watching and until next time.