Is it a good idea to invest in a new ICO?

Cryptocurrency is the latest trend to hit the tech world, and has gained a lot of momentum in the last few years. Everyone knows what Bitcoin is, and people also have an idea about other relevant terms like ‘blockchain.’ However, one term that is gaining more and more mainstream attention is the term ‘ICO’ which is a short form for Initial Coin offerings.

Ever since Bitcoin was launched in 2009, many other coins have surfaced in the market. At the moment, there are over 1400 coins, and the number is increasing every day. With every coin that is developed, there is the Initial Coin Offering (ICO) that seeks buyers to invest in the token before it hits the exchange platforms. This way, the currency manages to get its initial funding. In fact, ICOs have changed the rules for funding new startups that are based on the blockchain technology.

What is an ICO?

ICO is quite similar to the IPO (initial placement of stock securities) that deals amidst stock exchange platforms in traditional currency. Think of it as a blockchain platform for crowdfunding. Investors buy ‘tokens’ that are meant to be an important part of the application that the startup wants to create. The catch is that application will gain popularity, and hence the value of tokens will also increase.

This new way of gathering funding for new coins and promising new business ideas is a win-win situation for both the buyer and the entrepreneur. The investors can gain a big profit margin in a small period of time, while entrepreneurs are able to raise the required funds.

It seems like Initial coin offerings (ICOs) are here to stay. According to research by CoinDesk, ICOs have raised more money in the first three months of 2018, as compared to the whole of 2017.

Image Source

All these stats and enthusiasm displayed by techies have made us ponder over this pertinent question- Is it an intelligent idea to invest in a new ICO? Today we are going to throw some light on the main reasons why you should invest in a new ICO and which precautions should you take before deciding a certain coin.

Things to keep in mind before investing in an ICO

Make that you follow these steps before you decide to invest your hard earned money in an ICO:

• Read the ICO’s whitepaper:

Before finalizing an ICO to invest in, potential investors should read the whitepapers to evaluate the feasibility of the project. If, as an investor, you think that the idea has present and future real-world use, then go ahead.

• Find out the project’s MVP (minimum viable product) readiness:

If you find yourself interested in the project after reading the whitepaper, then we recommend you to check whether they offer MVP readiness and if the product has certain features that can act as a problem solver in the current scenario.

For example, Autocoincars is a platform that specifically targets crypto currency users that want to buy a car for sale with bitcoin and other leading crypto. This platform is developed to fill in the gap between car manufacturers, dealers, and buyers in the automobile industry by using cryptocurrency as the medium of purchase. What’s more, many car dealers are readily accepting cryptocurrency to buy and sell cars online.

If you think that the ICO is offering a solution to a real-world problem like the case mentioned above, then it’s time to move on to the next step.

• Compare it to competitors of the same niche:

Look for other competitors who are working in the same field and developing similar products or solutions to serve the market. If there are plenty, then identify the salient features of what makes this project special.

If you are thoroughly satisfied with your research, then we suggest to weigh all the pros and cons and make a decision. Any product or service that addresses immediate and future needs has a lot of scopes, and you will find the token’s value raising in no time.

Reasons why you should invest in ICO

1- High probability of the prices rising

As we mentioned earlier, early bird investors get the tokens in the lowest possible price. Now if you weigh the odds, there are close to zero chances that you will suffer a loss. In most cases, there is a high probability of the prices increasing, in which case you will make a profit.

The crypto market is very unstable and volatile, and you will have to make smart and timely decisions to gain maximum profit. For example, the people who bought Ethereum ICOS, Ether in 2014, invested $0.04 initially. Today, they are some of the biggest profit gainers as Ethereum’s prices are steadily increasing with each passing day.  

2- Discounted price for early bird investors

Whenever a new business plans to take off, the hardest part is to create awareness and convince the first few clients to invest. This is why many businesses offer sales and slashed prices to attract as many investors as possible. Remember that you can only benefit from the discounts at the ICO launch before the coin hits the exchange platforms.

3- Expect fast returns

The best part about investing in an ICO is that it doesn’t take long for coins to go live on the exchanges. Which means that the mere investment can increase abnormally within a matter of days. It’s the perfect way to make some quick cash. But remember there are a lot of scammers who disguise themselves as ICOs, so research is essential.

Conclusion:

Once you have found the ICO of your dreams, you can stay calm that the future of the coin is bright. Let us review the steps to invest in a promising ICO:

• Read the whitepaper and convince yourself on why you should invest in this particular coin.
• Buy and wait for the coin to go live.
• Watch the prices soar and monitor the developments.

The future is all about cryptocurrency and blockchain platforms that plan to make our life easier. The more a coin focuses on solving day to day problems, the higher its value will increase. Being an ICO investor, you can gain from all the developments that come with it.

So, are you ready to hunt for a suitable ICO to invest in? Let us know if you know about any promising ICOs, and we’ll start exploring them too.

References: Hackernoon – Entrepreneur