Since 2017 I have been investing and researching cryptocurrencies. As I started end of May 2017 with actually doing some investing, I have the feeling I was a bit too late. However my portfolio grew significantly compared to my investments and this is mostly because of my participation in ICOs, and I want to learn from experience and benefit as well.
Years ago one could invest in a company after a Initial Public Offering (IPO) but only via gateways (licensed investors and/or companies). Luckily that time is over as new blockchain companies go for a crowdsale by offering their cryptocurrency to allow people to invest in their vision, roadmap and promise before it is tradeable on exchanges. This process is called an Initial Coin Offering (ICO) and provides an interesting profitable investment to early adopters, but against a risk of course. Over the past very nasty ICO’s happened where people lost their money because of scams and so on.
There are some measurements I take not to get burned which helped me during my ICO adventures and I want to share them with you. Answers to these metrics are found by visiting a company’s website, watch YouTube, listen to experienced ICO investors, visit social media etc…:
- Rank your ICOs against some metrics important to you. Personally I use: team experience, unique selling point (USP),do they have a product, roadmap, price, max token supply and others.
- Watch YouTube ‘guru’s’ like Ian Balina, Michael Suppo, DataDash, CryptoLark about ICOs to gather a more generic opinion to determine whether you want to invest or not.
- Read Reddit, Telegram, Twitter and so on to determine a ‘gut feeling’ about the company, team and willingness to help the community.
- Decide whether YOU think it is relevant enough to put your money in.
The process of ICO’s can be sort of complex in the beginning so hereby a short explanation:
Whitelists
Some ICO’s use so-called whitelists. These whitelists are used to meet legislation and law and regulation. A completed form is required to participate in the ICO.
After completion it is not mandatory to participate during the crowd sale so it can not harm to register anyway.
Sometimes whitelists indicate signals for a good investment. Sometimes, due to high demand, whitelists close earlier. A lot of people then miss out on the ICO because they are too late to register and are triggered by FOMO (Fear Of Missing Out).
KYC
Next to the whitelist, a lot of ICO’s incorporate a KYC (Know Your Customer) process. In this KYC process, the investor must fill out his personal data and upload some type of ID.
Activity of the project
After whitelisting you can better investigate and follow the company and its activities. Please try to subscribe to Telegram, Twitter, Slack or any other channel to stay up to date about developments and any hard/soft caps that can influence your participation.
I hope this outset of my experience helps you in making better decisions. Contact me if you have questions or want to share experience.