INITIAL COIN OFFERINGS INVESTMENT STRATEGY
HOW DO YOU CREATE A SUCCESSFUL INVESTMENT STRATEGY FOR INITIAL COIN OFFERING (ICO)?
First, understand the basics. Cryptocurrency experts define an ICO as a strategy for fundraising and involve trading future coins for digital currencies considered highly liquid. The company sells a specific percentage of the currencies to the investors while the seller keeps the balance. The ICO permits investors to fund their preferred projects. The principal motivation for investors should be the coin’s price will be higher than the cost of the initial offering.
WHAT IS A CRYPTOCURRENCY WALLET?
Investors must understand how cryptocurrency wallets work. The digital asset functions as a medium of exchange utilizing cryptography in securing transactions. Users keep their currencies like Bitcoin (BTC) or Litecoin in an electronic wallet which is a private key. Only the owner knows the confidential and secure digital code. However, the person who owns this wallet also has a public key or numeric system linked to a particular currency amount.The digital wallet keeps both private and public keys which facilitates sending and receiving of coins. This wallet also serves as a personal ledger of individual transactions. Cryptocurrency providers recommend Bitcoin Core Wallet for BTC, Litecoin QT for Litecoin, and My Ether Wallet for Ethereum.
WHAT TO LOOK FOR IN COMPANIES
In purchasing from companies, investors need to understand they get tokens equivalent to certificates or vouchers. These documents confirm rights of ownership to that particular company asset. There is no universally-accepted ICO system since companies can sell any preferred resources. In most cases, these entities sell ownership to part of the firm’s intellectual property, a percentage of earnings, or possession of virtual values or resources.Investors should know that the company does not even guarantee the tokens’ total value. Owners can always reduce the amount. At the same time, there are numerous mechanisms for managing the cost of digital assets.Check out the partners of the organization which consists of electronic exchanges or platforms that exchange company tokens for virtual funds. Potential buyers can find relevant information on the websites of these enterprises. Start-ups usually publish all the information that an investor needs in their portals. Consider it a warning sign if the business does not post any data on its site.Review the team’s composition carefully. Serious businesses that launch an initial coin offering will not hesitate to publish details regarding their teams. These include biographies of individual members. Development teams must have broad experience in cryptocurrencies, Blockchain technology, and cryptography.The serious initial coin offering should have a White Paper or authoritative report that explains each element of the project. This description includes theories, technologies, distribution and use of tokens, and rights of users. Never trust an ICO that does not have any white paper.The project supports a particular foundation such as ERC20 or token standard for Ethereum. The organization classifies six functions for the benefit of other currencies within the platform of Ethereum. 91 out of 100 tokens that circulate in the market make use of the Ethereum system.Dissemination of tokens must be favorable which denotes it is necessary to determine the actual number of tokens for pre-sale along with the exact number of investors. If the value of the currency is high, there are probably billions circulated, so the company’s funding goals do not have a sense of legitimacy.The ICO team must communicate with participants frequently and show their accountability to prospective investors. Organizations usually communicate through social media platforms or blog sites. Company representatives must be able to answer questions from investors intelligently, explain market prospects, and discuss industry trends properly.
WHAT TO AVOID
Stay away from foul language. The credible ICO does not engage in speculation. It must not encourage future buyers to act only out of fear or guessing.Refrain from transacting with groups that maintain one-dimensional websites, refuse to publish team profiles, and social media links. Companies that remain nameless could be dubious because Blockchain-based solutions espouse absolute transparency.Read various white papers and web content from legal ICOs to understand what authentic language means. Fake companies can be persuasive and excite their product’s decentralized characteristics, supposedly protected transactions, as well as an advantage over traditional financial institutions. Finding a real and winning ICO can be difficult but nothing is impossible.
WHAT ARE THE TRENDS?
Last but not least keep track of trends in initial coin offerings. Some are dependable and enduring, but others are not. Start-up enterprises must conduct their due diligence to remain in good shape. This year, many ICOs relied on pure publicity. They advertise influential names in the industry to peddle their respective offerings.Such ventures tend to bypass traditional banking and financial institutions as well as venture capital corporations to raise finances. However, the United States Securities and Exchange Commission published a bulletin that underscored the risks of taking part in any coin offering. Investors must not worry too much considering that everything depends on the background and structure of an ICO. Electronic coins represent securities. When this happens, the sale of virtual assets must conform to federal securities legislation.The SEC also warned that fraudulent groups or persons could take advantage of these current technologies and innovations particularly the Blockchain and cryptocurrencies. Cybercrooks can use such novelties to put up an offering that seems impressive and legitimate. In the meantime, a bandwagon of ICO restrictions swept across the Asian region after the Bank of China and other government banks declared the illegal status of ICOs this September. Companies that engaged in raising funds must return the money to investors.The Government of South Korea followed the People’s Republic of China last week. In Taiwan, the legislature along with the opposition party announced the bureaucracy remained wary after the two countries banned these businesses. Many Asian governments believe criminal syndicates and drug cartels use the Bitcoin and other virtual currencies. As a result, the value of BTC plunged approximately 20% even as the currency managed to recover since then.Regulation can damage the capacity of the industry to prosper. The slowdown can affect stakeholders and principal players. Nonetheless, ICO advocates know the technology will flourish eventually and become a winner like Silicon Valley and social media networks. The next step is to find out which coin offerings will grow.
NEW ICO COMPANIES LIKE INFLUENCE MINE
The cryptocurrency world is growing at an alarming rate. New companies are popping out of the woodwork all over the place. Companies like Influence Mine ICO are doing their best to stand out from the crowd by offering a more “green” approach by creating currency through hydromining. If you are not familiar with the term or process, we will cover more about it in our next article.The company has not made an official release, but it is expected to create a buzz and excitement for people looking to buy in a new coin at the bottom. We will be sure to update you as we learn more.