Texas (KXII) – The Better Business Bureau says investment and cryptocurrency scams are on the rise, along with the amount they’re taking.

Monica Horton with the BBB said these scammers often play the long game to gain trust.

“They are developing a friendly relationship with someone over the course of several months,” she said.

Then they use that trust to convince victims into “investing” their money into something like the stock market or cryptocurrency.

“It’s a pretty involved scam where they are setting up these great looking platforms where you can watch your money grow,” Horton said.

Unfortunately for the victims, it’s just a facade.

“You start out small, but you keep on sending money,” Horton said. “So when it comes time to withdraw is when people realize that they have been scammed.”

That increased trust is increasing the amount the scammers are able to take as well.

“The average loss in 2020 was around $1,000, we have seen that increase recently to $6,000,” Horton said. “We have heard from a victim who was out $138,000.”

It’s not just older folks being taken advantage of either.

“Cryptocurrency investment scams are in the top three targeting the 18 to 24 demographic,” Horton said.

Horton said that always beware of strangers online and if it sounds too good to be true, it usually is.

“They’re making promises of guaranteed returns on your investment, that should be a red flag,” she said. “Just beware of anybody that really tries to befriend you.”

She said that prevention is key because once the money is gone, it’s usually gone for good.

“In this particular situation, there’s not a whole lot that can be done because you’ve typically sent your money outside the United States,” Horton said.

Scams can be reported to to the BBB Scam Tracker.

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The Federal Bureau of Investigation (FBI) has issued a strongly worded Public Service Announcement (PSA) regarding the Democratic People’s Republic of Korea’s (DPRK’s) aggressive targeting of cryptocurrency resources. The PSA comes as state-backed hackers have been observed increasing the persistence, scale, and sophistication of their efforts targeting sectors like cryptocurrency exchange-traded funds (ETFs) over recent months. Thankfully, the FBI also uses its PSA to reveal some of the social engineering tactics and mitigations to be aware of. It explains what to do if you think you’ve fallen victim to the DPRK’s malicious cyber actors.

According to the FBI’s statement, the DPRK’s latest digital onslaught is “complex and elaborate, often compromising victims with sophisticated technical acumen.” Individuals and firms in the decentralized finance (DeFi) industry are now favored targets. However, malicious cyber actors have been observed researching and preparing to focus on targets connected to cryptocurrency exchange-traded funds (ETFs) – so if you work with ETFs, you should be more careful than ever. The DPRK is happy to steal cryptocurrency funds from anywhere, though.

One of the characteristics of this new wave of malicious cyber activity from the DPRK is the extensive research being completed before an attempted heist. For social engineering purposes, the malicious actors will “scout prospective victims by reviewing social media activity, particularly on professional networking or employment-related platforms.” So, watch what platforms you are LinkedOn (ahem), and be sensitive to the depth of details you are communicating and sharing.

In addition to taking their time to cultivate topics and conversations with intended victims, DPRK agents sometimes impersonate people that a victim knows about (e.g., a prominent professional) or knows directly. It seems that those looking for a career move or change may be particularly vulnerable, as the FBI says DPRK agents also commonly impersonate recruitment firms.

After the steepest interest rate hikes in history, the Federal Reserve recently signaled it might soon adjust policy. Markets expect a 25 basis point cut at the upcoming September meeting, with more cuts likely to follow into 2025.

Several assets are likely poised to benefit from these adjustments, but one in particular is positioned best in this evolving landscape. Here’s why Bitcoin (BTC 0.38%) is the one asset investors should keep an eye on as the Fed turns from hawkish to dovish.

The current landscape

Although people celebrated Federal Reserve Chair Jerome Powell’s announcement that rate cuts will be coming, there’s reason to be less optimistic. Based on recent data and developments, the decision to cut rates seems to have been driven by concerns like the recent yen carry trade and the Bureau of Labor Statistics’ revision, which revealed a significant overcounting of 818,000 jobs. These developments stoked fears of fragility in the global economy and a weakening labor market, ultimately prompting the Fed to consider easing its stance.

However, the inflation rate is still 2.9%, well above the Federal Reserve’s long-stated 2% target, and one Powell had previously declared non-negotiable. Additionally, the U.S. economy remains relatively robust. Since the COVID-19 pandemic, the U.S. has only seen two quarters of negative real gross domestic product (GDP) growth, a key metric for measuring economic productivity. Furthermore, the latest third-quarter 2024 real GDP estimate is a solid 2%. This suggests the economy isn’t struggling under overly restrictive monetary policy.

It isn’t hard to see how rate cuts could cause inflation to tick up again in this scenario. Lowering interest rates encourages borrowing and spending, which boosts demand for goods and services. This increased demand in an economy that appears healthy exerts additional upward pressure on prices and further complicates the Federal Reserve’s efforts to maintain price stability.

Bitcoin: The premier asset

While increased liquidity and lower interest rates often lead to greater growth in equities as investors are incentivized to take on more risk, in this environment, I’d prefer a different asset: Bitcoin.

Considered the premier risk-on asset, Bitcoin has proven it thrives when there’s more liquidity in the market. From when the Fed slashed rates to near zero in February 2020 to February 2022, when rate hikes resumed, Bitcoin saw a staggering 375% jump. Its performance in that low-rate environment underscores its potential as rates begin to fall again.

But the primary reason Bitcoin is so attractive today isn’t just about benefiting from increased liquidity; it’s about safeguarding against inflation. In an economy that doesn’t appear to be struggling, the likelihood of inflation returning is significant. After the U.S. dollar lost 20% of its value over the last five years, I have no interest in returning to that scenario.

Fortunately, Bitcoin offers a solution. With a fixed supply of 21 million coins, of which 19.6 million are already in circulation, Bitcoin offers a unique hedge against central bank malpractice and government intervention. Its decentralized nature means it isn’t controlled by any single entity, and its underlying blockchain technology ensures security and transparency. These characteristics make Bitcoin not just a speculative asset, but a robust store of value in an uncertain economic landscape.

Final considerations

The Federal Reserve’s rate cuts have been a long time coming and will certainly boost the economy. But that doesn’t necessarily mean there won’t be potential consequences or other issues that arise.

If economic growth can somehow be managed with minimal inflation, then kudos to Powell. But with no guarantees, I’d rather put my trust in the most decentralized, secure, and finite asset in existence.

For investors looking to navigate these choppy waters, Bitcoin represents not just a speculative play, but a strategic allocation in a world where traditional assets are increasingly subject to the whims of central banks.