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How To Invest In ICOs (Initial Coin Offerings)

How To Invest In ICOs (Initial Coin Offerings)

What do initial coin offerings, namely ICOs, mean? ICOs is actually a crowdfunding based on cryptocurrency, which can be used as capital for startup companies, which in return sell a percentage of the cryptocurrency to the ones that offered support to the project in exchange for legal tender or mostly Bitcoin.

Understanding the process

If a cryptocurrency firm is set to develop a project of such type, an ICO may be the right source of funding. The project is clearly stated and each step is defined and pinpointed. Every detail from the amount of money they need, down to the deadlines, must be known and made public to the investors.

Therefore, if someone would want to invest in this certain ICO campaign, he can do so and his money will be referred to as tokens. If the funds are raised, the campaign is named as being successful, however, if it fails to do so, the money is returned to the backers and it is deemed as being unsuccessful.

What makes this investment a bit risky is the fact that many ICOs campaigns are often fraudulous and many funds are lost, while never being recovered. However, if the campaign is successful, the value of the cryptocoin is raised and the profit is huge.

As an example of such a success is the platform Ethereum which has Ethers as its coin tokens. Starting in 2015, it has raised funds such that the coin was worth $0.40. And only one year later, the coin went up to $14. A lot of money was to be made in this project. And still is, as Ethereum is now providing smart contracts to the ones who need to start their own ICO, having their own virtual wallets.

Even if ICOs are often compared to crowdfunding, in reality, the two do not resemble, as in the first the raised money is still going back as profit to the investor. Thus, ICOs are actually crowdsales.



How to invest

The first step in this investing takes place from the perspective of the developer, who creates an already-mentioned Ethereum smart contract. Over this smart contract, people register and they get a special wallet. The next step is sending ethers to this wallet and at the end of the ICO, the crypto tokens are distributed to the ones who are entitled to get them.

How do you buy Ethers or Bitcoins? Easy. Head over to Coinbase, register with your credit card or bank account, buy the coins you need and wait for your bank to approve the purchase. Just to be sure you get into the ICO, do this in advance, as many banks take longer to process such purchases.

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The question is, how so many early investors get more money than the later adopters? Simply because the ICO is broken down to multiple stages with its own special pricing. Therefore, the price will get higher and the profit will be lower. If you want to raise your profit, you must be an early adopter.

ICO Process


You get the crypto tokens and now you must trade them, but how can you do so?

You must check Coin Market Cap, and search for the currency you want to either buy or sell. In order for you to buy for the lowest price for your needed coin, you must check the market with the lowest one. And the same goes with the process of selling the coin with the highest price.

The secret stands in understanding which markets buy/sell the coin, and from where you can get out the most profitable.


Even if the prospects are promising, many initial coin offerings stagnate. There are two cases, one, they either fail or, two, they have a massive turning point in terms of their profit. You must be sure you have understood the risks and how to properly invest in ICOs.

As of the last period of time, while gaining a lot of interest, money are continuously invested in ICOs, and as in every game, there are winners and losers. Some are bound to lose, thus you must know how you gamble your investment.

You must know that ICOs are totally banned in China, as they consider them to be disruptive to economy, and they have regulatory rules in New York and Washington State.

If you are completely investing into initial coin offerings, you should also know that taxes do apply for the gains, even if you lose them at some point. As the crypto coins are not stable, the powerful ones will at some point lose their value for a period of time, thus you must know that even if a powerful coin is winning, it can as well be losing the next day.

Another thing to pay attention to is that many ICOs are scammy, and you could lose a lot, but the truth is that there is no right way to tell a right ICO from a bad one. So just be ready to play your part!

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How To Invest In ICOs (Initial Coin Offerings)


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