Before You Invest in an ICO- Watch This Video (Read This Post)
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:
Website
Is it well developed? What kind of information do they provide?
Developers
What is their reputation? Have they been involved with scams in the past? Do they have much experience with blockchain technology and cryptocurrency?
Whitepaper
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.
Open Source
Is their code open sourced so that others can see it and recognize any issues?
GitHub
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.
Community Sentiment
Are there many people who are vocally happy or disappointed with the way the team is making decisions?
Use Case
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?
Roadmap
What are their short term and long term goals? Are they meeting these goals?
This is so true, we need to carefully research and forget shake out the FOMO
ICO's are mostly scams, I personally don't invest in any ICO, I have my own 33,3% strategy, that has proven to make profits over and over again: 33,3% power strategy for the best profits in crypto land combined with very much security - if you are willing to take more risk
Glad you've found success! I agree that ICOs aren't the end-all be-all for crypto. We've got some time until we see big movements in these markets.
I agree this are the above things which we should follow not only for investing in ICO's but also when it comes to purchase and holding coins we and follow this.
Thanks for sharing with us.
Cheers @vishalmukadam! Thanks for the comment :)
Hi @heiditravels This is a really helpful post, I think you listed most of the main things to pay attention to. And yes, it applies not only to ICOs, but to cryptocurrencies as well.
I would like to add just one point - when assessing the ICO project and its team, don't forget to virtually put this project into a real existing industry (taking into consideration the current competition).
Even if all things your listed get a positive answer, still MAY NOT BE ENOUGH to invest. To get any considerable ROI (especially if you generally plan to hold tokens in long run) there should be:
Just one example.
Several years ago I did study an online course taught by Hasso Plattner (co-founder of SAP software company, a great man with net worth of $10.8 billion). The course promoted In-Memory Database Management. Technology-wise it was a huge break-though in comparison this a traditional database management approach. And it is hard to believe Hasso Plattner's team did not have enough resources to market this approach. But still, it is far from being widely used. Why? 3) Luck to overcome unknown obstacles.
So why should any new ICO skyrocket their technology or product in real super-competitive market conditions?
And the last question we need to ask ourselves? How many ICO funded projects have become established (with financially proved ROI)?
After asking myself I did choose to better invest in open-source technology-advanced cryptocurrencies, not ICOs.
New to crypto (well, I was 'in' in 2013, but out quickly) and new to Steemit. This is a fantastic checklist that I'll be using to vet my next crypto investments - thanks!
I don't even want to invest in ICOs right now unless they have an address and a statement on US SEC regulations and how they will pre-analytically adhere to it. Bittrex isn't even listing any new tokens.
I expect US crypto exchanges to be fined for some of the tokens they list already but I have a feeling the tokens already listed will be allowed to continue to be traded in the US at least.
Good stuff Heidi
Great post @heiditravels, reminds me of my own post on preparing for ICOs.
More crypto content creators like yourself need to give people this sort of tough-love information from time to time, but it's very easy to get wrapped up in the hype and ignore the fact that crypto can't be all sunshine & rainbows all the time.
Always important to remember that the crypto user demographic is significantly younger than traditional stock traders and investors, so taking the careful approach to managing finances isn't the first thing on many of their minds. Thank you for giving this kind of information, even if it doesn't get you as much attention as big hype content.
Thanks Heidi, it's easy to get caught up in excitement & FOMO. This is good advice for people as a wake up call.
Definitely, so often I want to check back in with the people who freak out over a small dip and see if they regret anything :D
;)
Biggest one is doing they have an mvp and a beta or live product.. u can test out and judge for yourself. I did that for golem and storj
I've found much success lately in day trading multiple varieties of crypto.. but the key to that success is not only being able to pick up on market trends and the possibilities for rises and falls.. but to do exactly what you've described here.
To do your research.
If you know nothing about something, not even a little bit, simply a name and that it's on an exchange.. you are not prepared to invest or trade on any real level beyond the idealogy that any new or low cost crypto will skyrocket at some point (as has been the easy-to-pick-up-on trend as of late, but does not always hold true..) which may very well happen.. but you might as well gamble in that case, as that is exactly what you're doing.
Very informative and well-written article, keep up the great content!
^^ I apply these values to my crypto investing/trading theories and it coincides quite well. :) ^^
Good work repect it