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ICO Investing: How to Purchase Initial Coin Offerings


A key factor in investing success? Be early to invest. Imagine yourself among the first investors in a tech company like Google or Facebook, for instance. Or, think about what your life would be like if could purchase ICO (initial coin offering) products for a giant cryptocurrency, such as Bitcoin and Ethereum?

Your portfolio could look differently, isn't it? There's always the possibility of getting in on the next significant IPO or ICO.

In this article we'll talk about ICO investing, how to acquire ICO coins, and the best places you can find ICO listings. In short, if you're still all "IDK" about ICOs, you're about for the crash course.

What Are ICOs?

The ICOs are akin to IPOs which are also known as initial public offerings that represent the first occasion that the general public is able to purchase the shares through an exchange. The primary difference is that ICOs are a public sale of cryptocurrency, whereas IPOs refer to stocks.

Like the way some investors take part in IPO investing, they also can participate in ICO investing, as well. This basically means buying an investment stock, or cryptocurrency, as soon as it's released to the market with the expectation (or belief) that it'll increase in value

It is now a huge market. Between 2016 and 2019, 7,400 ICO attempts were made to raise a total of 35 billion.

How ICOs Work

Companies launch an IPO, or go publicin order to raise funds. In essence, they're selling some of their holdings in exchange to raise cash. The same concept applies to the ICOs, which are crowdfunded initiatives to create a brand new cryptocurrency.

There is an ICO could be defined as "initial coin offering," which lets crypto investors participate on the ground floor of a cryptocurrency startup. The investors who participate in an ICO are part the very first investors to get involved in the development of new cryptocurrency, and as such could be the ones to gain the most (and it's an enormous "if") the crypto one is gaining value.

As for how an ICO really operates? It's different than an IPO that follows a very standard process involving various regulators and parties. In the case of crypto, it's more of an DIY approach. In short, the team behind a crypto elaborates on their plan in their white paper for the brand new system or cryptocurrency outlining the features of the system and what it can do.

Then, the crypto creators will focus on a marketing drive to convince people to make investments and buy into the currency. Participants who sign up and invest will be able to exchange money in exchange for the brand's coin or token.

The creators of cryptocurrency collect funds from investors by offering the cryptocurrency pre-ICO for sale. During this period when they issue their coins, they typically do so for sale at a reduced price, often in order to get the capital needed to build the currency.

This is, obviously an outline of things to consider. But things can be much more specific. But this should give an understanding of how ICOs function.

How to Value ICOs

IPO valuations usually reflect thorough review of the base company's bookkeeping and performance. The process of valuing the ICOs unique, because there's no company that has financial records to examine.

As such, hype and investor sentiment represents the primary basis of ICO valuations. In general, crypto assets are derived from functioning as cryptocurrencies, or utility or security tokens for certain networks and systems. It's difficult to find a price for them initially.

The value of an ICO value based upon the possible uses the coin may have in the future . These could increase the value. If investors are more hyped their hopes up, the more value could increase, however the reverse is true also.

Research suggests that negative investor attitudes can cause negative first-day returns for an ICO, which can impact the performance of the currency at least six months.

If this sounds risky, it's simply because. Cryptocurrencies are notoriously risky investment. Fraudsters and scammers can easily take advantage of investors with no understanding of the crypto space, while government regulators are still trying to define what their role is in the space.

How To Buy ICO Tokens in Four Steps

Are you unsure of how to buy ICO tokens? Follow these four steps:

Step 1: Register for the ICO

One of the first steps to buying ICO items, or even getting involved on the ground of a cryptocurrency's development as the investor do some research. This means researching new or potential ICOs, as well as maybe even reading through some white papers.

As well as reading the whitepaper you'll also want to know all there is to know about team who wrote it, and if it's received a lot of interest from investors elsewhere. In the event that the paper does not provide information on the code of the token or security options, it's a potential red flag that may warrant more careful scrutiny.

If you've discovered an ICO which you are interested in join to take part in the. It may take some effort however, it is possible to track the pre-ICO list as well as ICO listings on websites such as CoinDesk, ICOBench, TopICOlist.com, ICODrops.com, and CoinMarketCap.

Every ICO generally has different registration procedures. So, if you're curious, take a look for the best procedure, and then follow it as you need to.

Step 2: Set Aside Funds for Payment

Then, you'll have to prepare yourself to invest when your ready to set money in. This means having money set aside to facilitate the investment.

It's necessary to have fiat currency, such as dollars, or some other crypto ready to make an exchange, as needed (typically one of Bitcoin or Ethereum the two most popular cryptos). It is also necessary to have either crypto or money sitting within a digital wallet so that you can complete the trade

Also, ensure that you've joined the appropriate or correct crypto exchange to participate in the ICO. Certain exchanges will only permit investors to trade specific cryptos. You'll want to be sure the ICO you're looking for is listed at the particular exchange you're working with.

Step 3: Make the Exchange

This step is quite simple The trick is to execute the trade! Details here will depend on the specific ICO exchange, exchange, and processes.

Step 4: Receive and Store Your ICO Purchase

Ideally, following the conclusion of the trade the coins you purchased will be placed in your cryptocurrency wallet (whichever of the different types you pick) to be safe. Following that, it's just a matter just sitting back and letting the market decide what happens to your latest investment.

Be aware that ICO investment is by nature risky There's a strong possibility that things may get out of hand. Because of this, it is worth taking the time to closely watch the ICO and other announcements about the new crypto, so that you're able to make the best decisions about when or if you should decide to sell. One upside to ICOs compared with IPOs is that there's no IPO lock-up period that would prevent selling.