How to choose ICO for investments
Investment in ICO or new crypto currencies has quickly gained popularity mainly due to the fact that such investments can yield high returns in shortest possible time. There are many examples when ICO businessmen get superincomes, comparable to the profits of the arab sheikhs in the 70-ies.
At the same time, the lack of legal regulation, the use of complex technologies and indicative disregard, almost contempt by the leading financial market players takes wide range of traders and investors out of crypto assets market. Indeed, bad marketing, slow development and lack of long-term use leads to losing faith and trust in the token from the market and collapse of its value.
The truth that many cannot accept, is the most of the tokens the market are to collapse. Only a smaller its part will significantly increase during the 1-3 years and bring profit to its owners.
Choosing a reliable asset or investment project requires strategic thinking and careful assessment, which will significantly reduce the risk of failure and losing money. Its important to remember that investing can’t be a hobby or an enjoyable weekend pastime, unless you are a billionaire and pay not much attention to six zero figures at your bank account.
For everyone else, I mean for us, this activity will require time and meticulously thoughtful approach. There are a few issuies for potential investments to check before choosing the project to invest in.
Site desing and page on Bitcointalk
The site hosted on a free hosting and created using one of the template CRM system as like as Worpress, Wix, Tilda, etc, – a sure sign of a quick lifetime project. Lack of advertising and flash banners will also be a favorable sign. All pages should work correctly and you shouldn’t see messages like Error 404 / 505. The project page on Bitcointalk should also live a rich life and be as informative as possible. Here you can learn about the opinions of other investors.
The project team
Page with portraits and names of its owners, developers, and project managers – perhaps the most important on the site. If these persons are trustworthy, the chances to get profit from investment is growing up. Names can be entered into Google and the lack of links is likely not a good sign. Good one is if you find links to the profiles of project team members in social networks and the list of already completed projects, which accuracy can be checked.
Project stage and venture capital
Its important to understand on what stage the project is now. Is it have only the white pepper, or there is already launched product with limited functionality? There are many who willing to invest in projects that have only a couple working code lines, but the risk is increase obviously. The support from venture capital investors can also be a tangible advantage of the project. These investors support startups in its early stages of development, you will learn it from project’s website main page. It will be nice if well-known crypto VC is involved, as like as Blockchain Capital or Fenbushi (belongs to Ethereum founder Vitalik Buterin).
ICO is primarily a way to get the product to the market. Let’s see, does this product have real value and wherever it able to get benefits to people in the long terms. For example it could provide platform to develop blockchain software, which gives intrensic value of whole ecosystem, or provide capital flight in reppresed countries such as privacy coins allow, or distribute power sharing and use such as certain coins that distribute computer power might allow in future. If the project is created around such a product, its token value will increase, which means the investment will bring profit.
Support from media and community
Underestimating the importance of support from the crypto community and media is the weak point of many investors. The openness, presence in the public field and social media (Twitter, Facebook etc.) are equally important. Often users are rewarded for spreading positive information about the project. It can stimulate the buzz around it, but not help to create a healthy atmosphere.
Token distribution method
High token distribution within team members looks suspicious and points to high risk or fake project. Good one will link token distribution to the time frame marked in roadmap and white papper. You should watch carefully for this stage. Some projects simply release tokens after the ICO has ended. Some need to develop its beta version before sending out the tokens. According to percentage gain of Etherium (one year between ICO and token distribution, around 500% gain), Augur (1+ years, 1500%) and Decent (8 month, 350%), this break creates a very positive hype around the project.
Very often fresh investors lose it. An asset that will grow in the long term should go to the ICO with low capitalization. If its market capitalization exceeds the market demand, the IPO leads to fall its prices, which stabilized around some intrensic value. You can always check the market capitalization of the ICO projects on the coinmarketcap.com there data are constantly updated.
The key to successful investment is to find the optimal amount you are willing to spend on this particular project. Often there is enough time to get rid of tokens an leave the project without any major losses. Work scheme when you choose investment project is always looks alike and consists of several stages:
Token Lab — Rating Agency for ICO and Blockchain projects