The art of investing has changed greatly with the introduction of cryptocurrencies. Over the years, cryptocurrencies have proven to be highly profitable for the investors. Currently; there are over 800 cryptocurrencies in the market.
As a result, the market capitalisation of this market has already crossed the $100 billion mark. The ICOs or the Initial Coin Offerings have served as a vital medium to help investors to invest in the thriving cryptocurrency market.
However, the recent events and regulations have created doubts amongst the investors regarding the benefits of investing in ICOs at present. But I can assure you of one thing that investing in the ICO is still a favourable investment option.
The cryptocurrency market is still growing at a rapid pace thus new ICO projects are being created on a regular basis. As a result, you will always be able to get profit from investing at the ICOs.
But before we explore the benefits that ICOs offer which make them favourable investment options; it is better to understand what are ICOs and how they came to be.
Everything you need to know about ICOs:
As I told earlier, the term is ICO is an abbreviated version of Initial Coin Offering. ICO is basically a fundraiser tool that start-ups use to raise funds for working on new projects on the blockchain. Though many people mistake ICOs for the IPOs, they are actually vastly different.
The ICOs allow investors to trade future in crypto coins that have high current liquid value. So, you can always be able to trade cryptocurrencies like Bitcoin, Etherum and others easily.
Previously, launching an ICO project was enough for creating a successful ICO. But it has changed greatly with the passage of time. However, in the current landscape of the cryptocurrency market, the successful creation of an ICO depends greatly on how the developers present the ICO to the people, how they built trust among people and how the value for money is offered to the investors.
The process of creating an ICO thus starts with the publication of a white paper or pre-announcement. It is followed by offering where a contract is offered to the investors. In the end, PR teams conduct several marketing campaigns to draw the attention of the investors to their offerings.
Is it wise to invest in ICO in 2018?
• Volatility is something that is common for every investment option:
Yes, the volatility of the market is something that exists in every investment option. Whether it is the share market or an ICO, volatility up to some extent will be there since transaction of money is involved. So, rise and fall in the prices are very common and there is nothing to be alarmed about it.
Though it is true that the Initial Coin Offerings have fallen under some regulations in the recent past, you can still invest in it without any worry. Thus, there is absolutely nothing to be worried about.
• Complete control over the amount of money you are investing:
One of the few things that made investing in an ICO a favourable option in the first place is the fact that you get complete control over the money that you are investing in. The trick to investing in ICO is to send any amount that you are comfortable with to the public wallet provided by the ICO in their web page.
Once you send the money, the developers will provide you with corresponding amounts of tokens on your wallet. And you can then liquidate your tokens at any time you find suitable as per the market fluctuations and become highly profitable.
• The market capitalisation is very high:
The stability of any investment option is measured in terms of its market capitalisation. As I said earlier, there are over 800 cryptocurrencies in the world right now. And the market capitalisation of the cryptocurrency market has already exceeded the $100 billion mark. So, you can be assured completely about the market stability.
The volatility and fluctuations of the market are less worrisome when investing in an ICO. Furthermore, due to the high market capitalisation and proper control, ICOs are not subjected to any market manipulation. As a result, you will not have to worry about losing your money on the investment.
Things to look out for before investing in an ICO in 2018:
Since, we have already discussed over the favourability of investing in an ICO in the current days. It is time for me to provide you with a few simple tricks that you need to understand before investing in an ICO. Have a look:
• Understand your risk appetite:
The greatest quality of any smart investor is to understand the risk appetite. What is risk appetite? Well, it is the amount of money that you can afford to lose on your investment.
If anything happens to the ICO and the value of the token falls drastically in near future, then you will turn out to be the loser if you have not invested as per your risk appetite. So, it is very important to determine your risk appetite.
• The right time to invest:
Generally, it is never wise to invest anywhere if the investment option is unstable. You must wait for the sector to gain stability in order to make the investment. However, it is not possible given the current condition of the ICO where the fluctuations are increasing every day.
So, what can you do? Well, you can invest your money and buy tokens. Store the tokens in your wallet and wait for them to gain value in the future.
• The perfect time to sell:
When you have invested in an ICO and acquired tokens, you must never sell them in panic or due to any trend. You must hold your coins on the wallet till the price reaches an optimum point to sell it and gain maximum profit.
With the Chinese government imposing a ban on the ICOs and several regulations that various countries have imposed, many people have become doubtful about the future of investing in ICOs. However, I can assure you that you can still invest in them without any worry.