Just a few years back, in 2011, if you had purchased $100 of BTC ( it would have cost you around $0.30 per BTC) with this small amount of investment you would have bought around 333.33 BTC. The most important aspect to note is that after seven years, BTC has reached an all-time high of $22k. This means if we once again consider a case where if you had kept your 333.33 BTC, then its worth value would have been $7million today. It would have been an amazing return for a $100 initial investment.
Today, the dramatic upsurge of bitcoin has made many investors excited about cryptocurrencies. In fact, many investors are even anticipating similar gains by capitalizing seriously on promising Initial Coin Offerings (ICOs). These ICOs are a new kind of fundraising that permit investors to get in initially on new projects or companies. However, no investment is certain, and even if you have a longstanding emphasis, finding an efficient ICO could be hard. ICOs are a new business venture plus have numerous exclusive risks that differ them from an IPO you would find in the stock marketplace. If you had made up your mind to take a chance on an ICO, then here are few points to consider and must be counted before investing in ICOs:
Read the whitepaper
If a cryptocurrency company wants to raise money over an ICO, it makes a plan on a whitepaper which is just named the whitepaper. The whitepaper states whatever the project is about, how much cash is required to assume the project, how much of the coins the creators will keep for themselves as well as how long the ICO promotion will run for. So, if you are going put all your trust into an ICO, you must not ever skip reading the whitepaper. It might be a dry read. However, the whitepaper lays out the firm’s risks plus chances, along with the suggested uses for the cash raised through the ICO. For instance, the whitepaper would lay out if the coin frame is going toward have balloting rights, otherwise, if the coin pays out dividends then those bonuses will be monthly, trimester, yearly, or other.
Secure Bonus Tokens
Please remember that most ICOs have a habit of offering some bonus to incentivize investors to fund early. You can take, for instance, LiveEdu Pre-ICO, the minimum investment required was $3. However, investing $50 or more would make you eligible for a bonus of at least 25%. Consequently, as one of those savvy investors, you must look to get convoluted in ICOs from the Pre-ICO stage. Just in case you gain any bonus then you will obtain extra tokens for your early investment.
Hold, Sell, Hold Some More
After you have received your tokens, then you can jump to trade them on exchanges for other cryptocurrencies just like ETH or BTC or cash. Rather the best you can do is sell 30% of your tokens and then start to recover your investment. Then try to hold the leftover 70% for a few months in wait to sell them again. You got to understand that a cryptocurrency market is always volatile in nature. There will be a situation where uncertainty would surround you, but you should not get discouraged.
Read the project cautiously
Stay away from schemes with impractical/indistinct objectives. If a project does not have a clear-cut, accurate roadmap, it means that the persons behind it don’t know what they are doing, at Best. At worst, they do not care since they are not going to do anything.
If you have found an ICO promotion which shows any of the above signs, plus, especially, any blend of them, it is best to avoid contributing any cash to it. Also, do not put all your eggs in one basket or invest in one coin thinking it is going to rise considerably. Once failed, you would have nothing left. You would better discover five ICO’s that you have done a comprehensive investigation in and then restrict it down toward the top three.
Investing in ICOs does not always come with risks, but you must understand few of the risks and don’t let them force you into overthinking.