ICO cryptocurrencies are an excellent investment choice for investors since they are given at cheap rates in order to generate interest before they can begin to be sold on the stock exchanges. As a result, most of the tokens are in high demand when they first appear on the market, allowing early investors to profit from their purchases.
Even while initial coin offerings (ICOs) appear to be a fantastic investment opportunity, it is crucial to remember that not all of them are legitimate. Joseph Lubin, co-founder of Ethereum, and Brad Garlingehouse, CEO of Ripple, both expressed disappointment that the vast majority of initial coin offerings (ICOs) are scams.
This post is a detailed guide to investing in initial coin offerings (ICOs), designed to assist you in determining which ICOs to invest in and how to maximise earnings.
What Exactly Are Initial Coin Offerings (ICOs)?
A token sale in exchange for fiat currency or digital coins is known as an Initial Coin Offering (ICO), and it is a technique of raising funds utilised by projects and enterprises in order to sell tokens in exchange for fiat currency or digital coins. Because they are not regulated, businesses are able to raise capital quickly without having to go through the lengthy procedures that are required by traditional lenders such as banks and financial institutions.
ICOs provide investors with the option to become a part of big cryptocurrency projects while also earning a return on their investment if the value of the cryptocurrency rises in value. Purchasing cryptocurrencies in a cryptocurrency project that use the proof of stake (PoS) protocol may allow you to earn rewards just by staking the coins.
How to Choose the Most Appropriate Initial Coin Offering Tokens to Invest In
The first step in investing in ICO is identifying the most appropriate initial coin offering. However, this is not an easy task because initial coin offerings (ICOs) are flooding the market at an alarming rate. The following are the procedures to take in order to choose the best initial coin offerings to invest in:
Examine the White Paper for the Project.
When it comes to a token, it is only as good as the project it is associated with. As a result, it is recommended to only invest in an initial coin offering (ICO) token if the project has a high potential. You should read the white paper of the project that is the source of the token of interest if you want to learn more about it.
When a white paper is published, it is considered an authoritative study that informs readers about a problem and how the project under discussion intends to handle it. It contains information about the project, the tokens, and the manner in which they will be distributed. ICO creators will utilise this talking point to illustrate to investors why they should participate in the project by purchasing tokens through their initial coin offering (ICO).
Examine how the funds will be used in the long run.
An investor can evaluate how promising a project is by considering how the funds generated during an initial coin offering (ICO) will be used in the long run. It is recommended to only invest in initial coin offerings (ICOs) that dedicate cash to project development. The sustained development of a cryptocurrency project can contribute to the increase in the value of the tokens and the delivery of a high rate of return on investment.
See what the top crypto-communities have to say about it.
Cryptocurrency forums such as Reddit and Bitcointalk have established themselves as reputable sources of knowledge for those interested in learning everything they can about cryptocurrencies. The communities have the ability to examine projects from a variety of perspectives and provide opinions that may be relied upon when investing in cryptocurrencies. If you are interested in an ICO, you may just write a query about it and wait for responses, or you can read previous reports.
It is important to note that even within the crypto community, it is possible to come across some good threads that are distributed through bounty schemes that are solely focused on promoting an ICO in a positive light. Because of this, you should only take into consideration reports that are compatible with the conclusions of your own personal and professional evaluations.
Take a look at: IPO vs ICO: What’s the difference?
Examine the composition of the ICO team.
Evaluating the ICO team can provide you with valuable information about the project’s seriousness. Follow the members of the team development team and advisory team to get a sense of who they are and what they have accomplished in the past (es).
You can learn more about the members by searching for them on social media sites such as LinkedIn or by contacting the companies for which they currently work. You could even call out to them and engage in conversation with them, particularly if you use social media.
The goal is to gain an understanding of the team members’ dedication, skills, and ability to assist in the development of the project into a successful enterprise. If you notice that the members have received negative criticism as a result of their previous crypto and non-crypto activities, it is recommended that you avoid purchasing such tokens.
How to Invest in Initial Coin Offerings (ICOs)
After determining your desired ICO, you can proceed to purchase the tokens that are currently on sale. Here’s an example of how to make a cryptocurrency token investment:
Read the Token Purchase Procedure from beginning to end.
Every initial coin offering (ICO) has its unique strategy for conducting the token sale process. The majority of the time, they direct interested parties to a landing page from which they can purchase tokens using a variety of payment options. Others, on the other hand, choose to use cryptocurrency exchanges since they already have operational frameworks in place to enable cryptocurrency trading.
You ensure a successful cryptocurrency purchase, make sure to properly follow the required crypto sale protocol. For example, you should look into the maximum and minimum number of tokens that consumers are permitted to acquire from your website. The limits are in place to prevent a large number of tokens from being awarded to a single party.
Open a Wallet that is compatible with the game.
After deciding an initial coin offering (ICO) to invest in, you will be needed to open a wallet that is compatible with the cryptocurrency. A cryptocurrency wallet is a digital storage space for cryptocurrencies that can be accessed through a web browser. It should be noted that, despite the widely recognised definition, digital currency wallets do not really store digital coins.
What crypto wallets actually contain are sets of codes that allow users to connect with their blockchains, transfer and receive currencies, and view their trading history, among other functions. The private keys are a type of identification code that ensures that only you have access to your currencies when they are stored in a blockchain. It is imperative that the key is kept confidential at all times.
The other codes are the public keys, which are used to help determine the wallet’s address. In addition, your wallet will generate a seed phrase, which can be used to recover your private keys in the event of a loss.
Make certain that the wallet you choose is compatible with the ICO token you are considering. Ledger Nano S and MyEtherWallet are two excellent examples of cryptocurrency wallets available on the market. Keep in mind that you should never give out your private keys or the seed phrase of your wallet to anyone.
Take a look at: How to Avoid ICO Scams
Participate in the Exchange Being Employed in the Sale of Tokens
When an initial coin offering (ICO) token is being sold through a cryptocurrency exchange such as Binance or KuCoin, you will need to begin by becoming a member of that exchange. This entails the creation of a user account and the funding of that account.
The exchange hosting the ICO may restrict customers from purchasing the tokens with other coins like as Bitcoin, in which case they must utilise a cryptocurrency conversion tool such as Kraken or Localbitcoins.com to convert their cash into the supported token. The coins should then be transferred to the exchange hosting the targeted ICO.
Purchases can be made by navigating to the trading platform on the exchange and selecting the new initial coin offering token (ICO). Then, pair it with the coins in your exchange account and click the “buy” button to complete the transaction. The new ICO tokens will be credited to your exchange account as soon as they become available.
Transfer the Tokens to Your Wallet (optional).
The majority of bitcoin exchanges are regarded as insecure since they are centralised and hence a prime target for cybercriminals. If you go back over the history of cryptocurrencies, you will notice that every large loss has almost always occurred in the exchanges. In 2011, a hack of Mt. Gox resulted in the loss of more than 600,000 BTC, while a recent attack on Youbit resulted in the exchange being compelled to file for Chapter 11 protection.
It is recommended that you transfer your ICO tokens to your wallet as soon as possible after making your purchase to ensure their safety. Because you are the only one who has access to the private keys, this is considered a safer location. If you can put the tokens in a cold wallet, such as a hardware wallet or a paper wallet, they will be far safer to store.
Best ICOs to Invest In:
Some of the best ICOs to invest are:
How to Make Money from an Initial Coin Offering (ICO)
It is important to note that the technique chosen will be dependent on personal goals, which may include selling the coins quickly or holding them for a longer period of time.
Invest in the Tokens and Trade Them in the Markets
Instead of generating money from an ICO by selling the tokens as soon as they hit the market, you might consider trading the tokens on the open market instead of selling them immediately. Trading cryptocurrencies entails taking short- or long-term positions in response to market changes.
It’s crucial to remember that the cryptocurrency market can be extremely volatile at times. In order to minimise associated risks, traders should invest time in learning how to read market trends and making use of crucial features such as stop-loss orders and trailing stop-loss orders.
When the value of the tokens rises, sell them.
The most straightforward technique is to purchase the tokens on offer during the ICO and then sell them when the price rises. Due to the fact that only a limited number of tokens are issued into the market during the ICO, only a small number of people are able to take advantage of the chance.
After tokens are put into the market, the demand from those who did not receive the opportunity to purchase them drives the price of the tokens higher. This is an excellent opportunity to sell your property and earn a profit on your investment.
If you’ve been thinking that is ICO safe to invest in? Then you’ve come to the right place. It’s a terrific way to get started in the cryptocurrency industry while reaping the benefits of the high profits that come with it. Initiation of coin offerings (ICOs) provides investors with the ability to purchase digital coins at a low price and sell them later at a higher price, or vice versa.
However, it is vital to recognise that investing in initial coin offerings (ICOs) entails incurring some risks. “Should I make a cryptocurrency investment?” you might be wondering at this point. While the answer to the question is “yes,” it is crucial to proceed with caution and adhere to the following recommended practises for cryptocurrency investing: