How to Invest in an ICO.
What happens when you are interested in investing in an ICO (Initial Coin Offering)? You have heard of it and you know it’s lucrative. There is just one tiny problem. It is extremely risky. The major risk being; purchased tokens completely losing its value when compared to how much the ICO price is. In fact, some projects get stalled for years, remaining stagnant. These types neither acquire nor lose value but we are not interested in discussing the risks associated with investing in an Initial Coin Offering. We already did, it is here (CHECK HERE).
Right now, we are interested in how to invest in an ICO (Initial Coin Offering) with a full understanding of the risks involved.
Before You Invest in an ICO Examine the Project
The last you can do before investing in an ICO is to read the information on the project’s website. I mean, it’s only your money that is at stake here. You need to pay particular attention to the team and the advisors. Read up on their backgrounds and get to know them. Check that the project’s social media page (which include blogs) are updated regularly and professionally. The whitepaper is also important, study it.
Read the terms and condition of the ICO carefully and get a full understanding of their roadmap. Is it realistic or wishful thinking? Finally, check out what the internet is saying about the project. Check out social channels like Slack, Reddit, Telegram among others.
Know the Risks
It is important that you have a general idea of the risk you are involving yourself in. As far as investing in an ICO is concerned, never invest what you are not willing to lose. Make sure you check what the terms and conditions of the project say about your locality before investing anything. This is important because, in a country like China, ICOs are banned altogether.
Know Your Cryptocurrency
After you have decided to invest, your knowledge of cryptocurrencies is important for you to proceed. You need to understand the concept of wallet. At this point, you need to create a wallet and send a little Bitcoin to the wallet to have a general understanding of how things work.
The next step is to send the amount of Bitcoin you want to invest in your wallet. This is the payment you’ll send to the ICO contract address at the time of the ICO. After the ICO is done, you’ll get tokens that are equivalent in quantity to the Bitcoin you invested.
As a precaution, you must never send money to an ICO from an exchange. It is advisable that you send it from a wallet. Also, secure your wallet with a password.
After Investing in an ICO
After you have invested in an ICO, you have two possible choices. You can either chose to remain all in, keep your tokens because you believe in the long-term success of a project. Your second choice is to sell the token on an exchange such as Bitfinex, Bittrex, Binance, etc. You could also try a decentralized exchange like EtherDelta. However, the process is a bit complex and pressing the wrong button could make you lose your tokens.
Regardless of which investment strategy you pick, you stand to gain a lot from the ICO and that is because you got in early. This is the biggest advantage of investing in an ICO. So, sit back relax, and watch the value of your cryptocurrency grow.