Factors that you should Consider before investing in ICO

in #bitcoin7 years ago


The popularity of ICOs is rising day-by-day. This growth has been going through the last few years as Numerous and various field projects has been trying to raise funds through an ICO. Both the popularity and success of ICOs are intriguing and more and more people are trying to dig deeper in this subject and explore the new opportunities of their financial lives.

ICO stands for “Initial Coin Offering” and it’s somewhat related to the well-known term Initial Public Offering - IPO. IniThe initialblic offering is the process by which a private company can go public by selling its’ stocks to general public so that these companies can raise equity capital with the help of an IPO. ICOs are similar to IPOs as it has already been said, ICOs are not designed to be a physical currency, or a currency that can be used with its’ general purpose. Actually it is a way to support, invest and help grow a project, start-up, small business or a specific app. In order to be fully ready to invest in ICO you will have to understand more about how it works, is it legal, what you are buying, etc. In general, you have to know the factors that influences one's’ decision on making an investment in ICO.
Firstly you will need to Understand what you are buying in an ICO. Search for the sources on which you can learn more about ICOs. There are numerous platforms and blogs that provides you with enough information about current projects, current ICOs, their total market Caps, prices through the specific time sector put in to graph and in other helpful formats. You can search for TokenMarket, Smith+Crown, ICO alert, ICO Countdown, or other services that provide you with specific information.This is important so that you will Understand what you are buying in an ICO. Tokens that you are buying while investing in an ICO is nothing other than the analogue for the vouchers or other material documents confirming the ownership rights to a specific company asset when you are investing in an IPO. So you may have already realized that because of the similarity of ICO and IPO, the same principle goes for investing in ICO, but the true is that there is no Universal or a specific rule that applies on accepted mechanism of ICO. This means that not every company sell their tokens the same way others do. But, usually they sell the right of ownership to a specific part of company’s intellectual property.

Investing in a big ICO means following a bubble, you just have to make sure not to follow a bubble with a crowd. People tend to follow the saying “The Bigger the better”, this conception doesn’t refer to investing in ICO. People are usually driven by emotions, seeing that an ICO is reaching a big success they fear that they might miss out on something, resulting an impulse and irrational decision that might be regretted later.This makes Size of an ICO one of the most important factors to consider before investing. Albert Murphy, The Crypto Geek who made $2 Million in 2017 from ICOs, says that there is a “Golden Range” where projects can be ideal - not too small not too big. Statistically given, this size is somewhere in between $2M to $10M. By determining the perfect size of an ICO you are eliminating the risk factors of a coin failure and avoiding the regulatory issues that big projects carry.
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