The crypto market is booming, and more users have accepted the use of cryptocurrencies to simplify their transactions. One of the applications of the digital currency is investing in the Initial Coin Offering (ICO). The ICO market is progressing to a mature phase over the years, and its unique characteristics make ICO token holder excited in this virtual industry.
What is an ICO?
An Initial Coin Offering (ICO) is known as the fundraising system in the digital age which uses token or cryptocurrency to fund useful and essential projects. Most of the ICOs like traditional Initial Public Offering’s (IPOs) offer the best returns and bonuses to their early investors
For example, if you would have had made an investment of $10 in Jan 2011 in Bitcoins (BTC), you have had over 30 BTC for that price. Today, when one BTC is above $10000 mark and increasing it would have been worth over $300000. Also, an investment of $8 in Ethereum’s Ether token in 2016 would be worth $400 today. With these rocking returns, no wonder why many investors are inspired to invest in ICO.
So how do ICO tokens increase in value? When a business grows, the demand for its ICO tokens also expand. The business cash flow of 1% to 5% goes to the ICO token holders.
Stages of ICO Token Sale
The distribution of ICO tokens depends on the three stages. These stages will determine how much profit you’ll acquire once the project begins.
- Private Sale
The ICO private sale is the period wherein tokens which are undisclosed to the public or investors are sold. This is an exclusive sale, and ICOs implements a strict requirement on the participants. ICOs may conduct an interview to ensure that investors are aligned to their project’s goals.
Investors during the private sale get a quick return of investment when trading begins. Also, they have more chance of buying tokens compared to presales and public sale.
A pre-sale is when a company offers its token sale before it is launch. It could be understood as seed funding or the very initial fundraising to get the project running. An ICO pre-sale is generally advertised on various internet platforms such as in social media and websites.
As most of the benefits like bonuses and discounts are offered during a presale, there is a lot of competition too. Most of the investors try to push it to invest in this stage. So make sure you are in the pre-ICO list.
- Public Sale
The public sale or known as the crowdsale is the next phase after the presale. This is a crucial stage for an ICO as the success of the project depends on this phase. Thus public sale is more widely promoted and advertised compared to the ICO presale. However, lesser discounts and bonuses compared to private and presale periods where the tokens are available for all and sundry.
How to Invest in ICO Token
To invest in ICO, an investor must have a digital currency that is accepted in the crypto market. Here’s the process on how to invest in ICO token on presales and during ICO:
- Explore on Upcoming ICOs
Look for websites which feature or promotes new ICOs so you can plan for the upcoming ICOs. These websites usually have ICO Calendar to keep you updated of the active and upcoming ICOs. For a whitelisted ICO, it requires participants to be registered in advance.
Most companies prefer the whitelist registration so they can have an idea on the number of investors that will show up. This will also allow them to go through the “Know Your Customer” (KYC) process. They KYC involves getting personal details and uploading of documents required by the company. With this, investors can also set up their wallet, so they only need to transfer tokens during the sale period.
- Identify and Analyze the ICO
Identify which ICO you are interested in investing and if it offers a good project. Check out ICO reviews and analysis to determine its potential.
- Participate in the ICO
1. Register for an ICO through the project’s website
Legit projects usually have a website where the information or specifics of the project can be found such as the projects rationale, amount needed for the funding and the duration of the campaign.
Most high-profile and trusted ICOs require its investors to register. You need to fill up the form and go through the registration process.
2. Get Bitcoin or Ether
You need a Bitcoin or Ether, which are the major cryptocurrencies to join in an ICO. Although the Bitcoin is considered as the most dominant cryptocurrency, but Ethereum has been the platform of preference of ICOs for its convenient and stable Blockchain platform. Thus, Ether token is broadly used when investing in ICOs.
You can check the minimum investment of an ICO on their white paper which is generally between $10 to $100.
3. Move your cryptocurrencies to a wallet that you control
Never store your cryptocurrencies on a wallet given through an exchange as it puts the funds at risk. It is highly recommended to use a software wallet you have control of where you can keep your tokens. Hardware wallets are also advisable if you want to add security.
4. Purchase ICO tokens
Purchase ICO tokens by sending your cryptocurrency to the address indicated on the projects white paper. Usually, ICOs will show on their website the steps on how to participate in ICO to streamline the process.
Be extra cautious when sending funds. Ensure that the ICO’s website is not fraudulent and the campaign’s address is not fake. Make sure that you are transacting with a genuine ICO.
5. Receive ICO tokens to your address
Once the transaction is successful, you will receive the new purchased ICO tokens in your wallet. Take note that some ICO tokens may not reflect automatically, others take weeks or months depending on the terms of the ICO. You can check this information on the ICO’s website. If you already have the ICO tokens, then secure it in your wallet.
The steps mentioned above are the usual process in investing in ICO which is too tedious and too risky. However, with the advancement of technology, a platform has been developed for a more convenient and efficient way of ICO investing.
The ICOpicker platform offers their members to buy Bitcoin and Ethereum through their platform ensuring that transactions are hassle-free and secured. Users can purchase the cryptocurrencies using a credit card and create a wallet on the website. Not only that, members of the ICOPicker can directly send the crypto to the ICO they want to invest.
Plenty of ICO’s can be found in the ICOPicker platform that investors can choose from. Plus, the potential of the ICOs project has been reviewed and analyzed through crowdsourcing. The registration is free so make sure to sign up to their platform.
Who Can Invest on ICO Token
- Individual Investors
Investing in ICO as an individual investor can be challenging especially that most popular ICOs only accept big investors during ICO presale. Also, most of the time it is difficult to get whitelisted (ICO whitelist); and as the private sales are extremely time sensitive if you are a small to a medium investor, it is extremely difficult to make it at this stage.
- ICO Pools
An ICO pool is a group or community of individual investors and experts coming together to identify the best ICO to invest in. As a dedicated team, their success rate is much more than that of an individual investor. A trusted ICO pool not only secures your position in a private sale but also saves you the hassles of being worried about getting whitelisted and transaction failures.
From a range of investment options, you enjoy the flexibility of not putting all your eggs in one basket. If you’re an individual investor and want to make the most out of your ICO investment, you should be looking at being a part of some ICO pool to get the maximum benefits.
Investing in registered and legitimate ICO pools offer plenty of benefits: (1) funds are secure, (2) seamless transfer of funds, (3)investor’s identity is kept anonymous, (4) democratic process, (5) open group in Telegram (6) uses smart contract, and (7) flexible investment.
How to Avoid ICO Scam
With over $3.5 billion raised altogether so far by Fintech companies through their ICO’s, it wouldn’t be an exaggeration to say that in near future ICO’s will be replacing traditional IPOs as a new fundraising mechanism. With several ICOs already offering high returns they are also getting increasingly popular among investors. With more and more people wanting to invest in ICOs, the idea of getting quick and lucrative returns has made investors vulnerable to scams and frauds which are quite common.
Also, a lot of individual investors have been joining ICO pools and groups to make secure investments, but with Telegram being an open source which has little or no check for frauds, it is challenging to identify Genuine ICO pools and investor communities. If you’re an investor looking to be a part of a good and functional ICO pool or you want to invest in an ICO, here are six ways to avoid getting scammed.
Here are some guide questions for investors who are looking to be a part of a genuine and functional ICO pool or want to invest in an ICO:
- Is it a registered company?
If you are an existing investor or you show interest to be one, there are plenty of offers and claims you would come across from all different kinds of IDs and people. Most of these are completely not legit and don’t even have a company website let alone being a legitimate and registered organization. It is essential that when you join an ICO pool, you see if your ICO pool has a running and legitimate website and are an already registered company.
- Does it have an active community and discussion forums?
Before you join an ICO pool or any community of investors make sure you take a look at their blogs and discussion forums. By going through their blogs and analyzing their discussion forums on Telegram you could get an idea of what they do and whether they are legit or fake with the claims they make. Most importantly track their approach as most fake ICO pools push you to make immediate investments without discussing or educating.
- Is two-way communication allowed?
Any legitimate company and especially the ones that are making profitable investments should be allowing their registered users or community members to communicate freely on open groups where you are free to post criticisms along with your views and reviews as well. With an open group, you get to know that there is nothing fishy and a seamless two-way communication which allows active participation of community members ensures that you’re with a reliable organization.
- Are the claims realistic?
“Invest with us and double your money within two weeks! ”— Have you come across such claims? You know that real companies make realistic claims which they can technically prove. You must avoid all unrealistic claims, no matter how good they sound. Verify the claims made and also ask them why they make such claims and how they expect to fulfill these commitments. A genuine ICO pool or investment community will have a realistic explanation of all the claims they make. Don’t waste your time and money with something that sounds too good to be true.
- Have you done independent research?
As a responsible and smart investor, you must do your independent research and try to gather as much information possible before making a hasty decision, no matter how tempting the offer is. If you’re getting involved with an upcoming and new ICO pool, it is recommended to look at their website and know about their company details and expertise.
Check out the ICO whitepaper. This is a document which provides all information about the project such as the technical details, the issues which the project want to address, project roadmap, and etc.
Make sure to understand the whitepaper thoroughly. Examine the project’s introduction, the product, the members involved in the project and their expertise, and the ICO funding.
Also, aside from understanding the project and the people behind it, determine the blockchain technology the ICO uses.
- Are email messages and links come from reliable sources?
Last but not least, you must avoid following spoof and unknown emails and links that come to you via messages. There are plenty of scams where they place duplicate and fake links that resemble popular ICOs. Make sure that you type the address yourself in the browser while searching or verifying a link.
While you don’t want to be left out when the crypto market is booming, and ICOs are offering more returns than ever, it is equally important to tread with caution and make sure your funds are invested through proper channels.
Now that you have some idea how to avoid scam and fake ICO pools you should be looking for a legitimate and genuine ICO pool as it can help you with accurate trading signals allowing you to get best returns on your crypto investments.
Investing in an ICO can be risky. Thus, doing research before undertaking a cryptocurrency venture is a must.
It is also highly recommended that if you’re planning to invest in an ICO token sale, you should go with their private or the pre-sale period when you get the best deal and best results.
In cases where you have tried several attempts and still can’t find a good deal as an individual investor, try to invest through an ICO pool as there is exceptionally high competition during ICO presales.
Lastly, invest only on the amount you can afford to lose just in case some things will go wrong.
Want to know the active and upcoming ICO’s? Be part of ICOpicker now!