How to Invest in ICOs
ICOs can be easy money for startups. They’ve raised hundreds of millions of dollars over the past three years, so there’s no wonder that more and more companies are trying to leverage the power ICOs hold.
As an investor, though, finding a successful ICO can be a bit challenging, especially if you are not very tech-savvy. That’s where this guide can come in handy.
First things first, if you want to invest in ICOs, you need to monitor Initial Coin Offerings calendar lists that show current and upcoming ICOs. Some of the best platforms that make the process of finding ICO campaigns simple include:
ICO Rating
Ico Alert
Smithandcrown
TokenMarket
These markets work similarly to Kickstarter or Indiegogo, where companies present their ideas to the public, hoping to get enough support to fund the development of their projects.
Go to these websites and look through the list of active or upcoming ICOs. Some of the calendar sites, like ICO Ratings, even provide free detailed reports on ICOs, and whether they’re worth investing in. When you find something you’re interested in investing, go to the developer’s site and ensure they are a legitimate business. A good sign is if the developers link to their LinkedIn or Twitter accounts. Research their credentials and try to learn as much about their professional experience. Then, have a good look at their white paper and make sure it includes a description of the project, realistic goals, the costs, and a clear roadmap of how they plan to turn their idea into an actual product.
Next, go to BitcoinTalk.org, find the ANN thread about the cryptocurrency you’re interested in, and gauge community opinion on the ICO. Pay careful attention to the questions that the developers themselves answered. Did they address all of the users’ concerns or gave vague answers? Moreover, you can search the name of the ICO you’re interested in along with keywords like “scam,” “con,” or “MLM.” If you see any posts mentioning those keywords, then that’s a potential red flag, and it would be better to keep searching.
Once you’ve found an ICO campaign that you are confident is legit and think has enormous potential, send Bitcoins or Ether to the project’s Bitcoin or Ether address in exchange for tokens. Store these tokens in the ICO’s campaigns escrow wallet.
After a week or month or so (it usually depends on the project,) the tokens get listed on cryptocurrency exchange markets, such as Bittrex and Poloniex and became available for buying and selling to the general public.
You have a few options now: you can hold on to your cryptocurrency and hope it will further increase in value or you can sell it for Bitcoin or Ether and convert it to a fiat currency like dollars, euros or yen.
Just like with any other investment, don’t put all of your eggs in just one basket and hope the cryptocurrency will skyrocket in a few months. Find about five ICOs that you think might have potential, do your research, and then narrow the list to the top three. That way, if one fails, you won’t lose all of your investment.
I invest in numerous ICOs a month. I dedicate a part of my crypto portfolio to investing in ICOs. I started out putting in $100 in each ICO to first learn the ropes, and then after getting more comfortable, scaled it up to $500, and then $1,000 and so on.
If there’s an ICO you like, but are hesitant to invest in it, or you don’t meet the ICO investment requirements, you can always just wait for the tokens to get listed on an exchange and buy them then.