Hello steemians, we are back again to share our ICO investing experience and our latest tips.
So, what is an ICO?
ICO is an Initial Coin offering, essentially a way for the team to raise capital to launch a project in exchange for your cryptocurrency. In return you'll usually be sent tokens, and once released these may be used on the project platform or to be traded at various exchanges. Investing in ICOs is extremely risky but can also be very rewarding!
Don't get us wrong, this is an excellent way to build capital and can seem very appealing to those wishing to back the project. This may be based on a number of factors from the appealing bonuses that ICOs offer, or even reading and hearing about others who have invested in an ICO to then see it 'Moon' once the project has launched.
All is good and well when you back the right team and see it 30x but you must remember that 90% of the ICOs out there will not be around in 12 months’ time. This is not necessarily because they are scams but because there was no actual reason for the project to be utilising the blockchain.
TIP #1
ICOs ARE NOT CURRENTLY REGULATED and must be approached with a high level of due diligence. You must always DYOR (Do your own research). The best form of DYOR we have found and religiously follow is to create a spreadsheet and set out rigorous criteria and match that against the project. Don't be afraid to bombard the team with relevant questions, join their Telegram, join their Discord and get involved in the community. At the end of the day they want your money and you want to make a nice ROI (Return On Investment).
Whilst there are now more measures coming more into play with the likes of KYC (Know your customer) being used and limiting certain countries, states and set amounts of investment from any one person. Please always be vigilant.
TIP #2
What have we learnt as investors in Crypto and what do we now do differently?
Please consider this if you are investing in ICOs, we want to help and provide you with an insight to consider the mistakes we made so you don't have to!
As previously mentioned, ICOs can offer appealing bonuses at various stages of the project. But why is this not always good?
More often than not the ICO will use the following stages;
1 - Pre-Sale ICO
2 - Pre Public ICO
3 - ICO.
We have learnt that the further along the ICO the lower the bonus % usually is. However on the other hand the earlier the ICO is the harder it is to invest in the project. Pre-sale ICO are usually aimed at accredited investors and those that can afford to be backing the project with a substantial amount of money. Many people will not be in this boat and therefore will have to register and successfully complete KYCs and maybe get lucky enough to get in the Pre Public ICO or even the ICO. If this is the case and you're ready to invest and happy with everything, then get ready to be in a GAS & GWEI war (when sending eth).
From our experience (and to mention, this is not always the case) those projects offering Pre sale ICOs with appealing bonuses are often dumped almost instantly upon reaching an exchange. This allows you who may or may not have bought at any other time during the ICO to possibly pick that token up cheaper than the ICO price.
Whilst this is all well and good, the price will rise and probably exceed the ICO price. Again, you may or may not have bought in yet and are more than likely considering buying because the price is going to go even higher. We call this FOMO (Fear of missing out), of course this can happen but from our experience we have found it best to hold off for a few weeks. Wait until the token sale has ended and the team get busy in the background and the project seems to be flat. This in our opinion is the best time to buy if you cannot enter the Pre sale ICO because this is the time that the price of the token is lower than ICO.
Please remember that the value of the token below ICO price can be due to many other factors such as the overall state of the crypto world, any FUD (fear, uncertainty and doubt) being spread and even the overall marketcap.
TIP #3
Always keep an eye on the price of Bitcoin, usually when Bitcoin rises altcoins follow and vice versa.
Stay with us to learn more about technology and how to get involved in the crypto space.
Feel free to send us an email with any questions or topics you would like us to cover or find us on facebook & Instagram (ajtechllp)
Thanks
AJ Tech