The BEST piece of ICO advise | Part 1

With thousands of startups, initial public offerings (IPOs)and initial coin offerings (ICOs) there is an abundance of different project for an average investor to consider while planning out his portfolio. Based on the experience I gathered in over 2 years being in the game, I will share some of my thoughts and opinions on topic of what I am looking for or considering when deciding to invest into a project. Keep in mind that this is only my ideas based on experience, nothing is certain, nothing is a financial advice and everyone has to do their own deep research. All of my experience comes only from investing into ICOs, coin offerings where a team is generally raising money in cryptocurrencies such as bitcoin and ethereum in order to start their project.

• The whitepaper - its basically a blueprint for every team out there that is trying to raise funds through an ICO. Goal of the whitepaper is to tell you absolutely everything there is to know about the project. From vision, team members, roadmap, to the often quiet hard information as to how the technology works, what is it trying to accomplish and why would this project make world a better place; everything is explained in the whitepaper. As a rational investor it is a very warm recommendation to read the whitepaper of every single project you are planning to invest in. With experience you can start judging what is a good whitepaper and what is not, never forget that over 90% of new projects do not last over 5 years. Choose wisely.

never forget that over 90% of new projects do not last over 5 years. Choose wisely.

• The rules of the ICO - often neglected by newer investors that just wanna jump on board of a project that they really like the idea and their friends introduced them to it. Most of the ICOs happen in 2 or sometimes 3 stages. There is a pre-sale or a private sale first where normally only large investors can get in and they get some % bonus on their contribution (for example 20%). After that,a standard ICO is conducted where a certain amount of funds is asked from the investors and we call it a hardcap. When the hardcap is reached the ICO is over and everyone who invested receives their share of tokens based on the rules of distribution (example: you get 1000 Jenny tokens for 1 ETH).

• Now that ICO has been done successfully, a standard procedure is to apply for listing of the tokens on an exchange where they will be traded freely in an open market where prices obey the basic law of economics: supply and demand. Beware that sometimes it takes a very long time to get listed on any exchange, or the team decides to go for what is not one of the big ones. Do not forget that when the tokens hits the exchange, guys who bought into pre-sale have 20% more tokens which gives them quiet some selling pressure if they decide to do it. It happened before and it will happen again that some tokens just do not get listed anywhere or on the exchanges with almost no traffic, which is very unappealing for the investors. Bottom line is: know the rules, do not be afraid to ask the team questions, once you have sent your crypto to the ICO it is in their hands and they can do with it whatever they desire, no one is accountable for any loses and your tokens have no rights (in most cases), besides using them on their (futuristic) platform (if it ever launches).

no one is accountable for any loses and your tokens have no rights (in most cases), besides using them on their (futuristic) platform (if it ever launches).

• Always have a plan before going in - there is a wide variety of investors with different agendas, bankrolls, knowledge, but one things is common for all of them: “they think their investment will have a positive ROI(return on investment) over a certain period of time and they can profit from the initial investment”. Now, because its crypto here are a few different agendas: “Alice wants to invest USD and take possible profits in USD as well. Because the ICO does accept only Ethereum she will buy Ethereum with her USD, invest in and then she has a plan to hold for 3 years and cashout in USD in case she makes more then 3x on her investment at any point in time”, “Bob wants to invest Ethereum and take possible profits in Ethereum as well, because he believes in Ethereum and thinks its a very good long term cryptocurrency. He knows Jenny coin will launch on Binance (biggest exchange in the world) and that it is very likely price of Jenny coin will surge once it gets listed, his plan is to do a short term “flip” where he will sell once Jenny coin hits binance”

These are just 2 common though processes from different investors with very different strategies. As a rule of thumb advice: always make up your mind as to what you are aiming for, how long you want to be invested, what are the points on the projects roadmap you are looking to sell some of your stash. Keep in mind, most of the crypto whales use ICOs to just make more bitcoin or Ethereum (or dollars? :) ), they do not believe in 99% of the ICOs in the long term (5 years+), but they think that certain projects have very good RISK/REWARD ratios and will display a positive ROI over certain period of time.

Crypto is mostly unregulated, high volatile and as said before most of the projects fail. These are the facts. Never invest anything that you are not willing to lose, read and educate yourself deeply on the projects you like, keep up with the news and do not get discouraged or emotional if things do not go your way, stick to your plan.

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