At its heart, an Initial Coin Offering is crowd fundraising for a Blockchain Technology Startup Company. It’s the period of time for early investors in a Cryptocurrency/ Digital Token venture to buy coins or tokens at a fixed price. Because of its proven Peer 2 Peer payment blockchain, Bitcoin (BTC) is the currency of choice for buying crypto. Recent ICOs have accepted alternative methods of payment such as Ethereum and other major coins. Funds given during an ICO are used by the developers to launch the proposed blockchain project. The project is often supported by a business plan known as a white paper, prominent people in the cryptocurrency community, as well as social media and internet news. Unfortunately, because of the anti-prosperity regulations, many companies do not launch in the United States. Because of this, many websites for the popular exchanges block Americans by IP address!
RISKS OF LOSS
- Losses may happen because most ICOs launch based on concepts and don’t necessarily operational code in place
- More advanced development teams may have better models of you ICO of interest
BUYING INTO AN ICO
- ONLY BUY if you believe it will not trade lower on the open market after it launches If you can wait and buy it cheaper do NOT buy the ICO
- ICOs favors large investors because they can buy huge volumes without risking moving the market one penny
- ONLY BUY if you believe there will be attention given to the ICO at some point after it trades, and can be sold at a higher price in the future
- Buy at a low cost, sell at the spike, when it spikes, look into it to see if they’re actually creating code for a solid project or if it’s just a “pump and dump”
- Not to hold for the long term unless there is a solid foundation of operational code to the Blockchain project that can disrupt an area of industry immediately by creating convenience for the consumer
- Learn the rules of ICOs & IPOs
- ONLY BUY if you are risking a small portion of your portfolio! ICOs are not based on the company’s Internet reputation and is not something to dump 20% of your holdings into without a high degree of certainty! Only put 2 - 5% of your
- You have to be willing to take a huge loss on an ICO investment, there are so many things that can go wrong with an ICO, you must have a high tolerance for risk!
- ONLY BUY if you can receive the tokens/coins the issue into your cryptocurrency wallet! Not all exchanges will except the ICO tokens!
- ICOs are not “investments” unless you KNOW the development team and can actually rely on them to follow through on projects! Research the company/team read the white paper, check their individual connections! 6 Months Down the Line, have they launched code? Is it stable and energy efficient?
- ICOs launches are stock trades (day trading) is this something that is gonna take off or is it a good time to sell?
WHY BOTHER?
- when the ICO trades live might trade higher then the ICO price
- The ICO is a discount price for a potential project
- large investors need a method of buying, without moving prices in liquid crypto markets
- It teaches you how to understand the new market
To learn more about the Blockchain, cryptocurrency‘s, ICO’s, smart contracts check out www.runtheblockchain.com