An ICO (Initial Coin Offering) is similar to an IPO, (Initial Public Offering), with an IPO, when a private company wants to go public it goes through a rigorous vetting process with the regulators after which the company can be offered to the public by way of selling shares, an ICO is similiar, but different.
An ICO is used by cryptocurrency start-ups to "crowd fund" and because the cryptocurrency market is largely unregulated they are able to bypass the rigours of regulatory vetting and go straight to market.
ICOs are one of the best, if not the best way of investing in cryptocurrencies, buying cryptos at the ICO stage means that you are not only buying them at their starting price, often the companies behind them give bonus incentives to the people buying at that stage, typically, you get a percentage bonus of the coins that you buy if you buy within a price set or within certain dates, for example, if you buy £100 worth of XYZcoin you would get an additional £10 worth of said coin as a bonus or if you buy before a certain date you would get a predetermined amount of coins as an incentive, that is typically how it works, so, you can see that it is well worth investing at the ICO stage, not only will you be buying at the opening price you will also in most instances be gifted free coins (think about it for a moment, if the coins that you buy go up 10% and you have been gifted roughly 30% of what you bought, if you scale that up based on how much you invest then you would be dwelling that little bit longer in front of your local Lamborghini showroom)
People often invest in this niche of the marketplace as a buy and flip, so, you buy the coins wait for it to launch, typically coins tend to spike up shortly after launch, once it spikes you sell them plus the bonus coins that you were gifted and you are laughing, not only have you made a profit off the coins that you bought, you have also been gifted free money from the free coins that you were given.
Sounds simple right! If only it was that simple, before the scenario described above can play out a lot of due diligence has to be done.
In order to identify a genuine ICO amongst the myriad of ICOs being pumped out every day you have to do a bit, (lot), of research, you have to research the team behind the coin, what the coin is meant to do (does it meet a genuine niche in the market) and most importantly what sort of interest it is generating within the crypto community (watch videos by reputable Youtubers, look the coin up on Twitter, Reddit, etc. do a thorough social media search on the coin to see what sort of level of activity it is generating), also, and importantly, read the coin's white paper, the coin's white paper gives you a more in-depth understanding of what the coin is about and what the company's plans for it are, it is very important that you pay attention to the "road map" (the road map is often appended as a separate document) that the company has for the coin, the road map gives you a forecast of the projected trajectory of the coin, i.e. when the coin will be launched, what future developments will be taking place and when, etc. this allows you to identify landmarks in the timeline of the coin which should in turn inform your decision making on your investment.
Here are some resources to get you going:
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This was helpful to me because am yet to understand in deep sphere what ICO is all about, but this post has explained a lot about what I have had in mind... thank you for sharing
cool, im glad ... dont forget to resteem! .... lol .......i also have a vid on it on youtube by the way :)
I agree to what you are writing, it is very difficult to find the right ICO's to invest in. Sadly it is getting harder and harder, because there are so many of them right now!! I believe that not many of them create real value, some of the are only in it to fill their own pockets.....But IF you hit the right one...you could make massive profits!! Be very careful, and do your DD properly!
i agree ... dont forget to resteem! ... lol :)
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i agree ... dont forget to resteem! ... lol :)