In the late 90s, during the dotcom boom, the investors could simply toss their money into an IPO (Initial Public Offering) and would almost always get exceptional returns. During that time, there were many companies that experienced gargantuan first-day gains—but, then, they ended up disappointing the investors in the long run. However, at that time, not every company was cut from the same cloth; that is, some of the companies such as eBay and Amazon were the few that successfully made out of the dotcom bubble burst.
While the dotcom boom was in full swing, there were prudent investors who had the foresight and knowledge to pick the best IPOs from the bunch; only those investors managed to make huge gains during the boom. Now, nearly 20 years later, there is yet another opportunity where the wisest will make a healthy profit while the reckless will fall by the wayside; this innovative investment opportunity goes by the name of ICO or Initial Coin Offering. In this post, we are discussing the top three tips that every ICO investor should know to become wise.
Explaining ICO
Also known as “crowdsale,” ICO is an event in which a company will release its very own cryptocurrency with the primary purpose of funding. During the ICO event, the company will release a pre-defined number of crypto tokens; afterward, these tokens will be sold to its intended audiences.
Further, the tokens will usually be exchanged for bitcoins, but the medium of exchange can be fiat currency as well. Once the ICO event is completed, the company will raise the capital needed to develop the project or product. However, even if the investors hold the crypto tokens of a company, they will not be having an ownership of the business shares.
The tips to succeed at investing in an ICO
Find out everything about the team
If you are interested in buying the tokens from an ICO that you find online, then you should go to the company’s website first. Over there, you should find as much information as possible about the development team backing the project. If the developers are not using their real names and do not have their pictures, then things may be fishy. Always remember that you should not invest in a coin having a team of anonymous developers.
Things can be A-okay if you are able to find the developers of a crypto project on Google. You need to basically research a lot about the team; you should find about their educational background and about their work experience. Keep in mind that a credible crypto project’s developers will always be on GitHub, Twitter, or LinkedIn.
Go through the whitepaper
If a business—which is rolling out its crypto tokens soon—wants to raise money to support further development, it will list every single thing on the whitepaper. This document will explain the company’s vision, its crypto project, its tokens, and the upcoming ICO sale event.
Also, the whitepaper will even flesh out the future of the crypto project and how the business will use the raised funds in the future. So before investing in any ICO campaign, you should read the associated whitepaper and weigh the upside and downside of the project. Never ever skip reading the whitepaper no matter how big it is.
Never put all your eggs in one basket
Every wise investor will spread the risk regardless of how rich she/he is. So before investing in crypto tokens, you should learn to spread the risk. Even in the crypto world, hedge funding matters a lot. You need to find top five upcoming or ongoing ICO events; once you have done that, you need to further narrow down your research to the top three tokens available in the market.
If, however, you are a bit unsure about your capability to find the top five or the top three tokens, then search a lending platform that will hedge your bets. Yes, there are unique lending platforms that will surely help you find and invest in the top-performing crypto tokens.
So here were the top three tips that will make you a pro ICO investor in no time. If you have any other similar tips that we may have missed, then feel free to share them with us through your comments below.
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