Home Business Insights & Advice Five things to consider before investing in an Initial Coin Offering (ICO)

Five things to consider before investing in an Initial Coin Offering (ICO)

by Sarah Dunsby
22nd Aug 18 10:09 am

An initial coin offering or ICO involves crowd funding with future crypto coins for Bitcoin. ICOs are similar to IPOs or Initial Public Offerings, which allow investors to buy shares of a company. A lot of people are investing in ICOs right now, but it’s not something you should rush into. There are a key thing to consider before making a decision.

The stage of the project

One of the first things that you should look at with any ICO is what stage the project is in. There is a big difference between a project with an active beta version versus just a whitepaper. Many venture capitalists invest in projects that are in the very early stages, but you might not feel comfortable doing this. Take the time to look at the project’s official site so you can get as much information as possible on where it’s currently at.

Look at the community

You should also take a close look at the community surrounding the project so you can get a sense of what it is like. An open community with lots of support is always better for an ICO, so you’ll need to keep that in mind. If a community behind an ICO seems unstable or lacks transparency, you should look elsewhere for an investment opportunity.

Purpose of the token

Whenever you are looking at an ICO to potentially invest in, you will need to find out what they need the token for. Find out why the project can be sustained on either Etherum or Bitcoin. The deeper you dig with this line of questioning, the more you will reveal the true nature of the project.

The team

Take some time to learn about each team member that is behind the ICO, as it will give you some much-needed insight into its overall potential. If you cannot seem to find much information about the team of a certain ICO, consider it a red flag and move on. You never want to make any kind of investment before collecting extensive information on the people behind the venture. In the end you will be very glad you decided to do this.

The rating

An ICO rating can be useful in choosing the right project to invest in, but you should be careful. It is startling easy for people to purchase these ratings, so they aren’t always entirely reliable. You will need to look for highly reputable ICO rating platforms so you can make a good informed investment decision. As long as you use the right platforms, you shouldn’t have any problems. An ICO’s overall rating can give you a good sense as to which ones are worth your time and money.

Final thoughts

Investing in an ICO could be one of the best financial decisions you ever make, but it will require research and due diligence like any other type of investment. The time you take to explore your options and look into each one will eventually pay off.

Leave a Comment


Sign up to our daily news alerts

[ms-form id=1]