How can you choose a good ICO?
Cryptocurrencies have been one of the most profitable assets to hold this past couple of years. But what is the most profitable thing you can do with them? Many believe that it is ICOs (Initial Coin Offerings), but what exactly is an ICO and how do you know it’s legit?
Choosing the right ICO could be the deciding factor between you making a bunch of money down the line, or losing all of your investments. There are several factors that need to be decided about them, and we’ll try to tackle it.
What is an ICO?
As already mentioned an ICO is short for Initial Coin Offering, they’re mostly like IPOs Initial Public Offerings. These acronyms are used when companies are selling their core product to the public at an initial price in order to gather funds for future plans. Pretty much like an investor meeting, you offer them some of your money and they promise to double it or triple it. In this case, you won’t be buying a part of the company, you’ll be purchasing their coins, their main product and hoping that they will be able to grow its price down the line so that you can sell them later for a profit.
How to determine if an ICO is profitable
Behind an ICO, there is a company. This company is trying to make money just like you. In order for them to do that they need to have a good business model, future plans in order to grow the company. If you believe that the company has delusional plans, that most of them are based on speculations you could just completely avoid them. Usually, companies give away their unpreparedness for the market by saying “if” way too much. This just implies that they haven’t researched enough and don’t have alternatives, most of their operations are dependant on others and not themselves.
One more thing to consider is how these cryptos compare to others. What is so special about them? Are they just a mean to trade on the market? Or are they designed specifically for an individual industry? These are the questions you need to be asking yourself and the company before you make the decision to invest in an ICO. If the company doesn’t have a core market they want to tap into, it could prove quite dangerous as there are thousands of cryptos just laying around out there.
The people behind the company
It’s important to know the people who are actually making the ICO. If they are just random people, who just got the idea because it would be profitable, then in most cases you shouldn’t expect a large success or even a success in general. What you need to be looking for is people with experience and clear goals. For example, there are companies that are trying to tackle different industries, like Mobile Data. DENT is a coin that is specifically designed for Mobile Data and has been seeing a lot of success because of it. Now compare that to other coins like Dogecoin, which is just a simple coin designed to trade around the internet, their numbers have been going down ever since last year, the only reason they got big was that of the 2017 crypto craze, but that is now over.
Not only will the people behind the company bring them more credibility, but it will also showcase their transparency. With good transparency, you’ll receive more security and confidence about your deposits. Don’t make a decision before you look at the company’s white paper.
Any company that doesn’t pay attention to their investors and customers will eventually fall hard on their face. So make sure that no matter what happens you will be able to reach the company you’re investing in to ask a question. With crypto investment companies, first impressions usually dictate your future experience with them, so try to pay extra attention when you first get in contact.
In conclusion, ICOs could be dangerous, as any other investment you’ll make in your life. Investments are risky, there’s no going around it. All in all, try to consider the arguments we tried to make in this article, try to make them your guideline and you’ll have an easier time navigating through the ICOs details. One last thing, make sure that the company tries its best to make info delegation as simple as possible, big words are usually used when trying to hide some facts.