One of the key factors to investment success? Beginning early. Imagine being among the very first investors in a tech firm such as Google or Facebook for example. And, imagine what your life could be like if you could purchase ICO (initial coin offerings) assets for a mammoth cryptocurrency such as Bitcoin and Ethereum?
The portfolio you have would likely appear differently, isn't it? There's always the possibility that you could get an entry into the next IPO or ICO.
In this article we'll be discussing ICO investing, how to purchase ICO coins, and the best places to find ICO listings. If you're still all "IDK" about ICOs, we'll give you the crash course.
What Are ICOs?
It is similar to IPOs, initial public offerings that are the first time you can sell the stock from an exchange. The big difference is that these are the first public sales of cryptocurrency, whereas IPOs deal with stocks.
Additionally, just like some investors engage in IPO investing, they are able to participate in ICO investing too. This basically means buying a stock, or a cryptocurrency, when it's released to the market with the expectation (or expectation) that it will grow in value
ICOs have become a large market. From 2016 to 2019, more than 7,400 ICO attempts were made with a combined total of $35 billion.
How ICOs Work
Companies launch their own IPOs, or go to the public market, as a means to raise money. The idea is to sell a part of their stock to raise cash. The same reasoning applies to crowdfunding efforts to support a revolutionary cryptocurrency.
What is an ICO means an "initial coin offering," and allows crypto investors to get in on the ground starting blocks of a cryptocurrency startup. They are part of the first waves of investors who have jumped into the world of cryptocurrency, and as such can reap most when (and it's a big "if") the crypto the coin is valued.
In terms of how an ICO really functions? It's not like an IPO which is a very standard process involving various regulators and parties. In the process of bringing cryptos to market, it's more of a do-it-yourself process. In brief, the person or group behind a revolutionary crypto outline their plan in an article for the new system or cryptocurrency detailing what it is and how it will operate.
Following that, the cryptocurrency creators are focused on a sales effort to encourage people to invest and buy into the cryptocurrency. People who choose to participate and become investors will exchange funds for the latest project's coin or token.
Cryptocurrency creators collect money from investors by making the coin accessible pre-ICO to purchase. During this time when they issue their coins, they typically do so at a discount, typically to raise cash to continue to build the currency.
This is, of course an overview, but things can become more precise. But this should give an understanding of the way in which ICOs operate.
How to Value ICOs
IPO valuations are typically based on careful review of the base company's records and performances. The method of valuing ICOs can be quite different since there's an underlying entity that does not have accounting records to go through.
This is why the hype and investor sentiment constitute the primary basis of ICO valuations. Crypto assets, generally take their value via their role as cryptocurrencies or security or utility tokens for specific networks or systems. This makes it challenging to quantify their value straight at the start.
Investors usually decide the value of an ICO value on the basis of potential applications the coin could have in the future . These could result in price appreciation. Asico token
become the more potential value can increase, but this is not the case also.
Research suggests that negative investor opinion can affect first-day results for an ICO which could negatively affect the performance of the currency for up to six months.
If that sound risky that's because it is. IoTs are known to be a risky investment. Con artists and scammers are able to easily swindle investors with no experience in the crypto space, and authorities are still trying to define their role in this space.
How To Buy ICO Tokens in Four Steps
Are you wondering how to purchase ICO tokens? Take these steps:
Step 1: Register for the ICO
The first step for buying ICO offers, or to get an early start of a new cryptocurrency an investor, is to do a little homework. This could mean researching new and potential ICOs, and maybe even reading through some white papers.
As well as reviewing the white paper you'll want all there is to know about development team responsible for it, and whether the token has sparked interest from investors elsewhere. The whitepaper does not provide details about the token's code or security features , this is a warning sign that the token may require more due-diligence.
Once you've found an upcoming ICO that interests you be sure to sign up to take part in the. This may require some legwork but you'll find it easy to track your pre-ICO lists and ICO listings on sites like CoinDesk, ICOBench, TopICOlist.com, ICODrops.com, and CoinMarketCap.
Each ICO generally has different registration procedure. So, if you're interestedthen look around to find out the correct procedure, and then follow it as you need to.
Step 2: Set Aside Funds for Payment
Then, you'll have to be prepared to invest once it's time to invest some cash in. It's about having funds set aside to make it easier to fund the investment.
You'll need fiat currencies, like dollars, or some other cryptocurrency ready for an exchange, as needed (typically it's Bitcoin or Ethereum which are the two major cryptos). It is also necessary to have money and or crypto standing in a virtual wallet so that you are able to complete the trade
And finally, be sure to join the correct or correct crypto exchange for the ICO. Certain exchanges will only permit investors to trade certain cryptos. You'll want to make sure the ICO that you're looking at is listed at the particular exchange you're working with.
Step 3: Make the Exchange
The process is fairly straightforward You just need to make the trade! Details here will depend on the specific ICO Exchange, the kind of exchange, and processes.
Step 4: Receive and Store Your ICO Purchase
Ideally, after the conclusion of the transaction the new coins will be added to your crypto wallet (whichever you choose from the various types you decide to use) for safekeeping. In the end, it's a simple matter just sitting back and letting the market determine the outcome of your investment.
Take note that ICO investing is risky in the sense that it is and there's a decent chance that things can change. That's why it may be worth it to follow closely the ICO and other announcements about the new cryptocurrency, in order you can make smart choices about when and if it's time to sell. A benefit of ICOs in comparison with IPOs is that there is no IPO lock-up that prevents the sale.