How to make profit from ICO

30 March 2018

Making capital presupposes making money without your direct participation in any physical work, when you have your money work for you. With ever persisting popularity of cryptocurrencies and growing number of startups seeking to boost their operating capitals through Initial Coin Offerings, more people join the ranks of investors purchasing crypto tokens with expectations to make profit on potential change of the prices. What should you know to succeed in this practice?

Participating in Pre-sale

Many fintech startups making up their mind to enter the blockchain sphere through the launch of their Initial Coin Offering, generally hold pre-ICO session, where they raise funds to conduct the ICO, as the process involves substantial costs. During the pre-ICO startups offer token sale with some rebates and rewards offered to early purchasers. It means that an investor may benefit from the pre-sale, where he/she may earn from 10% of extra tokens, which was the case for Worldcore ICO. It is a reasonable gain, given the future price growth of the tokens that you acquire.

Participating in Pre-sale

Reading White Paper

Every company planning to hold an ICO fundraising campaign always publishes the White Paper, stating the entire plan of the future token sales, the detailed explanation of how the collected funds will be used, what kind of business the company plans to develop and improve with the milestones and landmarks also provided for the investors to be able to trace the achievements and course of the plan implementation. Therefore, experts strongly recommend starting investors to stay aware and informed reading carefully the White Paper before they decide on whether to acquire crypto tokens.

Know your ICO team

Experts recommend investors who want to buy tokens from a new startup to learn more about the staff behind the project to make sure that the company planning an ICO has proper workforce and specialists to achieve the claimed goals and keep up with its statements. Investors need to learn more about the development and the advisory teams of the project.

The team of developers is responsible for the disposal and due allocation of the raised funds for the benchmarks on the way of the project implementation and the ultimate target achievement. The advisory team, which involves such specialists as lawyers, auditors and business management experts, performs the functions of a ‘regulatory’ body in the process of the project development and realization. They monitor the entire process of the funds allocation, control the expenses and ensure compliance of the company with the regulations and laws. Thus, it is very important for a potential ICO participant to familiarize themselves with the individuals working for the project, adequacy of their experience and competence to the stated program.

Know the number of tokens

The number of potentially issued tokens plays an important role in future returns on investments made into the ICO, because if a startup establishes no limits on future issue of the tokens, they won’t be unique, and as a consequence their price will be low. Investors are advised to participate in the ICOs, where the number of circulating tokens will be limited by a cap. Worldcore, for instance, issued a limited number of tokens, while all tokens remaining unsold after the completion of the ICO were liquidated. It means that investors have a strong confidence in that the price of the acquired tokens will be growing based on the business performance of the company.

Know the number of tokens

Making wise allocation

After the tokens are purchased, investors usually wait for the price to go up to make profit on the difference selling out the tokens. Specialists in cryptocurrency trading recommend investors to practice of policy of installment trading. Given the volatility of the cryptocurrency market and uncertainty about future behavior of the new tokens, investors may consider the option to sell some portion of their purchased tokens after the ICO is closed. This will likely buffer the investments. The remaining portion of the tokens will be the risk an investor assumes.

Conclusion

Joining any investment schemes and practices requires judicious approach and weighing all pros and cons based on the through study of all available information. On the other hand, Fortune favors the daring, which is brightly exemplified by Bitcoin. Individuals, who dared to spend $100 for BTC several years ago, today are millionaires, despite all ups and downs in the price of the cryptocurrency recorded so far. Take your risks, stay wary, but act bravely and enthusiastically.

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