What is an ICO? These three letters form an abbreviation that stands for an Initial Coin Offering. An ICO campaign is essentially the sales of coins (which can also be called 'tokens') for either digital currencies or fiat money. In the future, the ICO participants can use the tokens they have purchased either for making payments immediately on the project platform or for performing trading operations on various crypto-currency exchanges. Instead of the above abbreviation, one can also use the word 'crowd-sale'.
Investing in an Initial Coin Offering (ICO) can be a highly profitable undertaking. At the same time, it's an extremely high-risk business. Investing in tokens is similar to investing in the venture market, in which the assets of start-ups have every chance for a skyrocketing growth of as many as 30-40 times. However, according to regular observations, very many venture investments turn out to be unsuccessful.
At the initial coin offering stage, startup companies are usually not ready to present a finished product. However, they already have a certain project idea that has been documented in the form of a white paper and a road map. Quite possibly, the startup company is ready to showcase a prototype of their future product. The purpose of this stage is to raise so-called 'seed investments'. It would be justified to call them venture investments, as they are characterized by very high risks. Out of ten investment rounds, an average of five fail to make any profit for the depositor. Three or four start-ups manage to attain a modest level of profitability. And one or two projects make a hit and experience a skyrocketing growth of up to several dozen times.
This raises the question about evaluating the growth prospects of one or another token. Before you can answer it, you need to conduct a thorough analysis of the project itself and its intended market. As a potential investor, you need to analyze every detail. To this end, you should compartmentalize the project into main points and evaluate each of them separately. This allows you to determine the pros and cons of the startup, the prospects for its development, and its potential shortcomings.
Below are the parameters to consider as part of the project analysis:
The term Pre-Sale denotes the earliest stage of the Initial Coin Offering, during which only a limited number of users are granted the opportunity to purchase the tokens of the startup company. More often than not, the minimum investment threshold is raised too high at this stage. Sometimes it is set at a stratospheric level that reaches millions of dollars. On the other hand, the circle of people allowed to participate in the pre-ICO sale of the tokens is small. However, this stage does offer the best prices for the coins of the startup company.
Correspondingly, the term Token Sale is used to refer to the large-scale sale of the startup company's tokens on a general basis to anyone who has the purchasing power. As a rule, this stage does not envisage any restrictions on either the minimum purchase amount or the circle of participants allowed to make a purchase. The only limitation is the time framework of the Initial Coin Offering itself.
At either of the two investment stages, the potential investor or token buyer needs to monitor the amount of investments poured into the project. There is one simple rule of thumb: if the investments raised during the pre-ICO and ICO stages are more than impressive, it entails a significantly lower likelihood of a good price surge in the future. Of course, there are exceptions to this rule (for example, Ethereum), but they are extremely rare to occur. It is the better and wiser option to try and avoid crypto-currency Initial Coin Offering projects that can boast of a huge initial capitalization.
Another bad indication is a very short pre-ICO stage that raises huge investments, followed by a sluggish main stage. In this case, there's a high probability of fraud and number drive-ups. The potential investor and token buyer should try and stay away from such projects.
In any case, you need to evaluate the pros and cons of every crypto-currency Initial Coin Offering project using an individual approach. There are no universally applicable rules or rigid standards in this sphere. The market in question is still too young for its golden standards and rules to be outlined.
The Iconeat service platform performs the function of a hub where you can find reliable information on all ICO projects started in the sphere of crypto-currencies. We carefully study and probe each Initial Coin Offering project, evaluating the product itself, its growth and scaling capabilities. We communicate with the project team and learn all the fine details about the upcoming Initial Coin Offering. After obtaining all this information straight from the source, we make all our findings publicly available to potential investors and token buyers on our website.
Our primary goal is to make the market of Initial Coin Offering (ICO) projects simple, transpicuous, and easily understandable to every potential investor. We strive to achieve the maximum possible eradication of fraud during the investment stages of any Initial Coin Offering. We love and appreciate our users. If you have any questions or suggestions, please send us an email at the address specified below. We will make sure to provide honest answers to all of your questions and prompt responses to all of your requests.