Cryp-tac-to’s 12 stages of ICO Investment
We’ve just had the 12th day of Christmas a few days ago, and the first ICO that I invested in just went live. So, I thought it would be useful (and funny) to list my 12 steps of ICO investment. From research to completion.
Note that this is my actual real life experience, I’ve just left the coin name out so I’m not shilling, but if you really want to know just ask in the comments and I’ll reply and let you know.
Step 1 – Find your ICO
What you should do: Look around all the best ICO rating sites, check out the top vlogs and blogs. Listen to the top podcasts. Then do your own research on each of the coins as well.
What I did: Looked at a couple of sites, got bored and picked one that got a decent score on one of the rating sites, with a cool coin name.
Step 2 – Go and check out the website
What you should do: Check the website from front to back. Does it look like a website that’s been in place a while? Is it an actual company website, or just a site knocked up for an ICO? Ideally you want to be investing in a company that is already somewhat established, not one that has just formed to create yet another token!
What I did: Looked at the front page and was dazzled by the flashing lights and shapes flying all over the screen, I did watch a video that was something like this:
That sold it for me!
Step 3 – Check out the team behind the project
What you should do: Check there is a proper team in place. It should be plastered all over the website. They should have real pictures of themselves. They should have credentials that can be easily checked with some independent searching. They should have experience in the area that the token is targeting. They should have other successfully businesses/projects behind them, preferably in the same area.
What I did: Checked out the first few pictures – to be honest they looked like stock photos, or people from America’s Most Wanted. One of them had worked for Google – for all I know he took out the trash – so I was happy.
Step 4 – Read the whitepaper
What you should do: To start with, if there isn’t a whitepaper then run for the hills! If there is, read it all. You might not understand it all but if they are trying to solve a real problem it should be reasonably easy to understand. In my experience the weaker the technology the more ridiculously complicated the whitepaper gets. Try and get a feel for the problem they are trying to solve. Is it a problem that needs solving, or are they just creating a nice looking coin and saying lot's of nothing about blockchain over and over again?
What I did: 82 pages – bollocks to that.
Step 5 – Check the Roadmap
What you should do: Check that the timings look realistic but not excessively long. Let’s face it, most of you are going to want to invest in an ICO that looks solid but is looking to deliver this side of 2020! Make sure the deliverables are actual products and not just things like January – Rainbows, March – Unicorns, May – Candy Floss. Make sure the ICO itself has an end date, and finishes on a date not too far in the future.
What I did: Saw the ICO finished at the beginning of January, which was fortuitous because I had penciled in that date as the day when I was going to get rich quick. Stopped looking after that.
Step 6 – Do the Math
What you should do: Does the ICO have a hard cap on how much it wants to raise in the ICO? This is just personal preference, but I don’t like ICOs that don’t have a hard cap, it just seems like they are trying to make as much as possible before everybody finds out they are producing fuck all. Check how much they are selling the initial coin for, do the conversion from ETH to USD if you need to. Then compare this to the number of coins they intend to put into circulation. You are looking for a realistic relation between the coins ICO price per coin and the number of coins. In other words, if they are going to circulate 50 billion coins and the price per coin is 3 dollars, you probably want to avoid it!
What I did: Oooo I get lots of coins for 0.2 Eth, I can’t lose!
Step 7 – Buy the coins
What you should do: Not that much to do at this stage other than put in the amount you want. Make sure you double, and triple check your wallet address. Oh, and DO NOT use an exchange address to buy your coins. I wouldn’t even use an exchange if the ICO documents said it was OK. Make sure you have a wallet like MEW or a hardware wallet if you have one. Also, at this point you can still get a feel for the ICO. They should have a smooth purchase experience, plenty of FAQs, and the ICO I invested in wanted identification. I took this as a good sign.
What I did:Actually, I did all of the above. There’s no way I’m messing this stage up, I want my coins!
Step 8 – Wait for the ICO to finish
What you should do: Just wait. If you get lucky and it’s a good ICO it might finish early. Especially if you took my advice above and went for an ICO with a hard cap. You might as well just chill out at this stage; all the hard work is done, and you can’t do anything until your coin is released on an exchange.
What I did: Obsessively checked the ICO website and every social media channel urging the ICO to reach the hard cap ASAP!
Step 9 – That annoying bit between when the ICO finishes and it goes on the first exchange
What you should do: At this stage, make sure you are signed up for every single channel that the company are using, you need to make sure you do not miss an update. You need to find out exactly when they will be adding the coin to an exchange, and if you can which exchange. Also, if you are so inclined start contributing to the reddit, get some shilling done for your chosen coin!
What I did: Ripple was booming, I totally forgot I’d contributed to the ICO.
Step 10 – Your coin goes on the exchange!
What you should do: That depends on your strategy. I presume at this point that you have decided whether you are going to sell straight away or hold for the medium to long term. If you are selling straight away for the quick profit, then I would make sure you are signed up for all the major exchanges before your coin is released. You do not want to get caught with your pants down trying to sign up for an exchange while your coin is being sold off and dropping like a stone. It’s worth saying that I have only been involved in one ICO, but I have observed that they usually dip after first release as all those that just want the initial quick profit sell off. That happened in the ICO I was involved in. If you are holding medium/long term you don’t need to do anything at this point.
What I did: Rejoiced as my coin was added to one of the biggest exchanges! For nearly 10x what I paid per coin in the ICO – what the hell just happened!
Step 11 – The aftermath
What you should do: Keep tabs on your chosen coin, shill for it if you’re into that sort of thing. If you are holding long, keep up to date with the project progress. Keep an eye on milestones and whether the project is meeting them. Are the team still communicating well, are things generally looking on track? Remember just because you we’re going to go long it doesn’t mean you have tied yourself to the coin forever. If your instincts tell you that the project is going south it might be best to sell up if you’re already up a considerable amount. It’s down to you to make this judgement. Also review your ICO experience, for example: did the coin hit the exchange at the price you expected?
What I did: Nothing, I’m now officially an ICO investing genius, there was no luck involved at all. I’m now in the middle of shoving my profits in every ICO I see with a fancy website.
Step 12 – Follow and Upvote Cryp-tac-to
Come on, you know you want to!