There are many positives of taking part in ICO.
- You are helping the company launch its product. The key goal for every ICO participant is to help fund a project that they personally consider interesting.
- There is also an opportunity to make a profit selling ICO tokens after you’ve purchased them.
In most cases, the crypto-tokens released during an ICO are sold at a fixed price denominated in Bitcoins or US dollars. The price isn’t backed by anything but the community’s faith in the development team to release a finished product . After the project is developed and launched, the tokens’ value becomes secured by a working product. That leads to an increase in price. When this happens, the original backers may sell their tokens for huge profits.
For example, during Ethereum ICO in 2014, the tokens were sold at a price ranging from $0.3 per token. After the project’s main platform was released in July 2015, the price has risen significantly. This means that some of the luckiest participants were able to claim an ROI of over 60000 percent.
However, profits aren’t guaranteed. An ICO campaign may fail and then all contributions will be returned to their senders. Even if it does succeed, but the developers are not able to deliver a final product, the price of tokens will never go up. This is a risk that all ICO participants have to take into account.