Unless you are one of the few successful day traders of crypto who can make the right calls just by looking at the charts, LISTEN UP.
This is going to be some tough love but I can’t say this enough.
If you aren’t willing to at least read the white paper of a crypto project, why in the world are you willing to give them your money?
Here’s how being an educated investor can save your butt and ease your mind when the crypto rollercoaster inevitably kicks into gear.
- If you invest in a project that you’ve thoroughly researched, you’re an active member of the community, then you won’t be so quick to sell when the dip inevitably happens.
- Educating yourself will help teach you how to better identify a quality investment and how to avoid giving your money to a project with no real plans.
- It’s the uneducated ones who sell low and buy high. They are the ones who can’t weather the storm, and who are easily influenced by the FUD and FOMO spread by those who want to influence the price and take advantage of those who should, but don’t know better.
- If you’re in it for the get rich quick idea, you’ll most likely end up broke even quicker.
I know that ICO mania is real and we are still in it, who knows how long it will last, or how the new regulations will influence them.
If you are finding yourself interested in investing in any ICOs, here is a check list for things you need to know before you invest:
Is it well developed? What kind of information do they provide?
What is their reputation? Have they been involved with scams in the past? Do they have much experience with blockchain technology and cryptocurrency?
Do they even have a white paper? If so, read it with a cynical eye. Be mindful of the information they are providing and what information they are leaving out.
Is their code open sourced so that others can see it and recognize any issues?
Look at their activity via GitHub. Do they make improvements very often? If they don’t thats a red flag.
How active is their social media accounts?
Do they have an enthusiastic community backing them? Do they give timely updates?
How do they plan to allocate the profits from their ICO?
Is a big chunk going towards the founders? How much are they putting towards development? Is it really necessary?
Total supply of coins?
More coins means diluted value.
How much are they charging per coin in their ICO?
What is the outlook for your return on investment?
Will they hold a PREsale?
This means they will allow for whales to come in and buy a large amount of coins. This also means these whales will be able to affect the price should they want to do so.
Are there many people who are vocally happy or disappointed with the way the team is making decisions?
Is this new project really even needed? Is this something that blockchain technology will truly fix or improve upon? Are they just using ICO mania to capitalize on eager investors?
Minimal Viable Product
Is there at least proof that this team has established a working product? Are they just making promises for something in the future?
What are their short term and long term goals? Are they meeting these goals?