ICO Investing: How to Purchase Initial Coin Offerings
One of the keys to investing success? Beginning early. Imagine being among the initial investors in a tech firm like Google or Facebook, for instance. Consider what your life would be like if had the opportunity to purchase ICO (initial coin offering) products for a giant cryptocurrency such as Bitcoin and Ethereum?
Your portfolio might appear quite different, isn't it? There's always a chance 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 where to find ICO listings. In short, if you're still all "IDK" about ICOs, you're about to get the crash course.
What Are ICOs?
These are very similar to IPOs and IPOs. They are the first public offerings that represent the first occasion that the public is able to purchase stocks on an exchange. The big difference is that ICOs concern the public sale of cryptocurrency, whereas IPOs relate to stocks.
Just as some investors have taken part in IPO investing, they also can take part in ICO investing too. This basically means buying shares, or a cryptocurrency, when it's on the market with the expectation (or of) that it increases in value.
They have grown into a massive market. From 2016 to 2019, more than 7,400 ICO attempted took place that raised a total of $35 billion.
How ICOs Work
Companies go through an IPO or go to the public market, as a means to raise funds. In essence, they're selling some of their own ownership in exchange to raise cash. Similar reasoning is applied to the ICOs, which are crowdfunded efforts to fund a new cryptocurrency.
An ICO is an "initial coin offering," and lets crypto investors participate on the ground beginning of a crypto startup. The investors who participate in an ICO are part the first to join the new crypto, and as such they could reap the most should (and it's an enormous "if") the crypto which they're investing in rises in value.
As for how an ICO really functions? It's not like an IPO that follows regular procedures that involve multiple regulators and parties. In the process of bringing cryptos to market, it's more of a self-contained process. In short, the individual or team behind a crypto is able to outline their goals in an white paper for the new crypto system explaining the nature of the crypto and what it can do.
After that, the crypto creators focus on a marketing push to get people to invest and buy into the cryptocurrency. Those who opt to participate and become investors can exchange money to purchase the project's coin or token.
Cryptocurrency creators collect money from investors, by making the coin available before the ICO for sale. At this point they usually issue their coins for sale at a reduced price, often in order to get capital to continue to develop the currency.
This is, in fact it's a rough overview. Things can be more detailed. However, this should give you an idea of how ICOs work.
How to Value ICOs
IPO valuations typically reflect meticulous review of the base company's books and performance. The process of valuing ICOs is very different, as there's no underlying company with books of financials to study.
Thus, the frenzied and investor sentiment constitute the main foundation of ICO valuations. All crypto assets gain their value from functioning as cryptocurrencies, or utility tokens, or security tokens for specific networks or systems. That makes it difficult to quantify their value straight prior to the launch.
Investors typically determine the value of an ICO value based on the potential applications the coin could have at some point in the future. That could result in price appreciation. The more hyped investors become then the higher the chance that the value can soar, but the reverse is true too.
Research suggests that a negative confidence can result in negative first-day results for an ICO that could affect the performance of the currency for at most six months.
If that sounds risky, it's simply because. It is known that ICOs are a risky investment. False advertising and con artists could easily profit from investors who have no knowledge of the crypto industry, and regulators from the government are trying to understand their role in the industry.
How To Buy ICO Tokens in Four Steps
You are wondering how to buy ICO tokens? Then follow these four steps:
Step 1: Register for the ICO
One of the first steps to buying ICO options, as well as get at the beginning of a cryptocurrency's development as an investor do some research. That includes researching new and potentially ICOs, and maybe even reading some white documents.
Alongside reviewing the white paper you'll need to know everything there is to know about team behind the project, as well as whether it's received a lot of interest from other investors. If this white paper does not include details about the token's source code or security capabilities, that's an potential red flag that may require more due-diligence.
If you've discovered an ICO that you like consider signing up to take part in it. It may take some effort but you'll be able track your pre-ICO lists and ICO listings on websites like CoinDesk, ICOBench, TopICOlist.com, ICODrops.com, and CoinMarketCap.
Each ICO typically has different registration procedure. So, if there's something you're interested in, check out for the best procedure and follow it as needed.
Step 2: Set Aside Funds for Payment
After that, you'll need prepare for investing when the time comes to make some money into the account. presale ico means putting money aside to help facilitate the investment.
It is necessary to have fiat currency, for instance dollars, or a different cryptocurrency that is ready to exchange, as needed (typically, either Bitcoin or Ethereum which are the two major cryptos). Also, you'll need currency and/or crypto held in a digital bank account in order to complete the exchange
Make sure that you've registered with the appropriate or appropriate crypto exchange for the ICO. Certain exchanges allow investors to trade certain cryptos. You'll want to make sure the ICO you're aiming for is registered on the exchange you're working for.
Step 3: Make the Exchange
This part is pretty simple Simply execute the trade! The exact details will be contingent on the individual ICO or exchange as well as procedures.
Step 4: Receive and Store Your ICO Purchase
Ideally, following the successful completion of the trade that your new funds should be deposited in your cryptocurrency wallet (whichever type you choose) to be safe. Following that, it's just a matter of relaxing and letting the market determine what happens to your latest investment.
Be aware that ICO investment is by nature risky with a significant likelihood that things might get out of hand. For that reason, it may be worth it to carefully monitor the ICO along with other news surrounding the cryptocurrency of the future, so that you make educated decisions about when or if it's time to sell. The advantage of ICOs to IPOs is the absence of an IPO lock-up , which can hinder selling.