How to Evaluate the Best ICO Investment
It's no secret that ICOs (Initial Coin Offerings) have now become the preferred vehicle for raising funds. If you are new to this concept, an ICO is a type of crowdfunding that involves cryptocurrencies. A company looking to raise money to fund a blockchain-based project launches an ICO, and interested investors buy some of the projects token with fiat currency.
Since their introduction, ICOs have helped kick start many Blockchain-based startups. In 2017 alone, Startups were able to raise $5.6 billion through ICOs. Besides presenting a terrific opportunity for companies to raise funds for their projects, it's also an opportunity for investors to buy tokens that they can sell later at a profit. However, with the plethora of ICOs coming up every other year, scams cannot be ruled out, and it's vital you know how to assess the best ICO investment options.
So, how do you navigate around? Let's delve in and find out.
How to Evaluate ICOs
• Read the Whitepaper
The whitepaper is the main source of ICO information. It is in the whitepaper that you will learn why a company is raising the needed funds. A good white paper is clearly outlined and uses straightforward terms. The objective of the whitepaper is to convince you, as an investor, to participate in the ICOs journey.
It is vital as an investor you take the time to read the whitepaper and evaluate the feasibility of the use case. Understand where your money is going and how it is going to be used. The best ICOs have nothing to hide. If you read a whitepaper and it leaves you with more questions than answers, then you might be in the wrong place.
• Check the stage of the project
Gone are the days when investors could jump into a company's project while still in the idea stage. If all a company has is a whitepaper detailing an idea and nothing beyond that, then it might not be a great investment. The best ICOs deliver more than just a whitepaper with a rough road map. It is safer to invest in a project that is close to launching a fully functioning product.
• Check the team behind the project
The whitepaper will list the name of developers behind a project. You can do a quick Google search to be sure of their qualification and credentials. If a project's developers are anonymous or don't fit their qualifications, that is a red flag.
Many unreliable ICOs will claim the involvement of prominent figures just to entice investors. Most of the time, such prominent figures don't even know such projects exist. Take time to read where the projects team members went to school and what projects they have worked on before, preferable crypto. The best ICOs have qualified team members with some experience in cryptocurrency.
• Check community and media
The best ICOs have a wide and open supporting community. The more people involved are involved in an ICO, the more reliable the ICO might be. You can check for Telegram chats for investors or Facebook and Twitter following. Social media can be convenient when evaluating ICOs.
ICOs with great communities involve both developers and members' interaction. ICO's project developers' participation helps with boosting the credibility of the ICO. Community members can ask relevant questions about projects and get prompt replies.
• VC Investors
The involvement of venture capital investors in an ICO is an excellent sign of a good ICO. Venture capital investors live off investment, which makes them the pickiest contributors. They take time before investing in a project, mostly evaluating how they can profit from the project.
Venture capital investors will never consider investing in projects that do not meet their requirements. The more VC-investors in an ICO, the better your chances of reaping a bounty harvest from your ICO investment.
All in all, extensive research is vital when it comes to landing the best ICO. Investing in a good ICO reduces the risk of damaging financial losses and boost the probability of high ROI. If you are looking to invest in ICOs, there are several great ICO platforms to help you out.
Top ICO platforms which can help you start your crypto Journey
CoinSchedule provides ratings for ICOs, exchanges, coin, stablecoins, airdrops, and IEO (Initial Exchange Offering). You can also get statistics related to crypto token sales.
This platform helps you, as an investor, to make a better investment without fear or worry. The transparency it provides helps with your investment decision.
ICOcreed is an organisation that reviews and rates ICOs. They provide lists of ICOs which have been reviewed by the ICOcreed expert team. On their website, you can get information on active ICOs, upcoming ICOs, and ended ICOs.
If you have no clue where to start your crypto journey, ICOcreed helps point you in the right direction. You can easily find the best ICO to invest in with their help.
ICOHunter is a platform that provides detailed information on ICO projects. This is to help you make the right investment choice and put your money where there is a possible ROI.
On their website, you will find information and analysis related to different ICO projects. All you have to do is select a project, and you get all the relevant information. The websites also provide information about ongoing projects, upcoming projects, and past projects.
• ICO Drops
ICO Drops is a platform that reviews and rates ICOs. This platform provides critical information on their listed ICOs. You also get to read about active ICOs, upcoming ICOs and ended ICOs. The platform utilises social media platforms like Facebook and Twitter, where you can get more information on ICOs.
• ICO Bench
ICO Bench is another platform that reviews and rates ICOs. The ICOs are reviewed by ICO Bench experts who come from various fields like finance, investment, media, and trading. The reviews help you learn more about ICOs' whitepapers, teams, roadmaps, and dates.
While ICOs can be lucrative, it's equally a risky business. ICO scams are not only increasing, but the nature of these scams is also evolving. Before you invest, it's crucial that you research extensively, and identify serious projects from hastily organised ones that may simply be out to get your money.
If you find anything unsatisfactory when evaluating an ICO based on the criteria we discussed earlier, it's advisable that you stay away from it. However, even when you land on the best ICO investment, there can never be a surety that a given project will succeed. Therefore only invest what you can afford to lose should things go wrong.
About the author:
Jay Jackson is a blockchain enthusiast and a freelance writer at topcryptowriter.com. He works closely with brands (people, businesses and startups) in the crypto sphere. He currently writes Blog posts, Guides, Press releases, ICO reviews, eBooks & Whitepapers. You can find him on LinkedIn.
The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.
Last updated: 04/03/2020