Not all investors know about Initial Coin Offering (ICO). ICO is a relatively new term in the field of cryptocurrency. Despite its freshness, the crypto community is rapidly expanding. It can be your next investment. It holds great potential if you understand it. With this, it is crucial that you know different things about ICO.
What is ICO?
ICO is akin to Initial Public Offering (IPO). IPO refers to the first sale of stock, which is issued by a specific company to the public. Before opening to the public, the company is considered private with a small number of shareholders and investors. Now, ICO is a means to raise funds for a cryptocurrency venture. ICO is utilised by startup companies to circumvent tedious and rigorous capital-raising process needed by banks and other capitalists. The company will initiate ICO campaign – selling a percentage of cryptocurrency to investors of the project in exchange for payment of bitcoins.
What to consider when investing in ICO?
The path to investment is challenging because you need to look beyond the catchphrase or slogan of the company. You need to set parameters to make sure that you are putting your investments in the right place. It is therefore important to find out if the company is a quality ICO and the classification of the ICO. This is to give you an idea of what to expect in the future.
How to evaluate a quality ICO?
In evaluating a quality ICO, you should research first. The first thing that you should look for is the company’s circle or community. This includes the social metrics, distinguished investors, and influencer mentions. The next one is the product itself. Does it have an addressable market? How about a prototype? Another thing to evaluate is the finance specifically token supply and allocation as well as the hard cap. Finally, check the team of the company. Are there advisors and other professionals steering? You need to evaluate thoroughly. Do not rush. Take your time.
What are the classifications of ICOs?
In determining whether it is a good company or not, you should also consider the different classification of ICOs. The classification includes stellar, solid and stealth. Stellar ICO usually stands out from the rest because it has a hefty addressable market. This is the kind of ICO that has the potential to be great in few years time. Stellar ICOs have strong metrics and prominent influencers. Solid ICO, on the other hand, features members with a good track record. Solid ICOs focus on solving problems that are important. Stealth ICOs is what you would expect – ICOs that are not on the radar of investors and influencers. It remains hidden because of the lack of network or poor marketing strategies.
Where to find good ICOs?
You have to know that there are sites that offer ico rating to help the people seeking for the same. You need to find one and examine the listed companies. Always do your due diligence when assessing and researching because it can make a difference at the end of the day.