I have been in Cryptoland since the beginning of 2017. It’s been a wild ride full ups and downs, some significant successes and a lot of avoidable mistakes. Since my last article was so well received, I am encouraged to share more ideas. I this article I will try to condensate some of the things I learned while investing in several ICO’S.
A Word About ICO’s
Initial coin offerings or ICO’s offer excellent opportunities to profit and grow your crypto portfolio. In 2017 we’ve seen astronomical growth in the number of ICO’s and amounts raised. Even in the current bear market, those who chose the right projects are now in a very good position. It is important to point out that ICO investing is a risky business and you could potentially lose all your hard earned money.
Market Sentiment and Timing Your ICO Investments.
The first thing to check before investing in an ICO is the general sentiment on the market. Usually, a bear market is an excellent opportunity to invest in high-quality projects at a discount but not a good time to participate in ICO’s. On the other hand, a bull market is a perfect time to invest in ICO’s as a significant percentage of projects could turn a profit.
TIP: Always check when the tokens are going to be available for trading, the longer the wait the harder is to predict the sentiment of the market when they are out.
Influencers and Cult Thinking
Let’s start this section by saying the following. Don’t trust anybody but yourself, influencers, especially in the ICO arena have much to gain from using their clout to manipulate market price and hype. In many cases only the fact that a popular influencer is shilling a project is a good reason to consider participating given the right circumstances.
Today for most ICO’s you need to be white-listed in order to participate, so the supply of the ICO is limited and influencers can greatly amplify the demand for the ICO by promoting it. All those who are no able to participate in the ICO will pump the price once the token hits the market. It‘s a self-fulfilling prophecy.
TIP: Make sure you sign up for the upcoming projects whitelist before they get hyped, icodrops.com is an excellent place to stay on top of it. If you get lucky Ian Ballina will shill the heck out one of your chosen ICO’s.
Don’t get Presale’ed
Sometimes before the ICO companies run a private sale, Usually at a discounted price. Always make sure you find out what the price for the private sale was and whether there is a vesting time or hold preventing early investors to dump the token once it hits the exchanges. In simple terms, big discount on presale and no vesting means it is a terrible idea to invest.
TIP: if the information is not publicly disclosed on their official site or social channels, be careful, Make sure you know exactly what happened during the private sale.
Token Economics Matter
You have to make sure you are not overpaying. Always check the token supply in relation the amount raised to know what the market cap is. Then you can compare with other after ICO projects in the same industry to have an idea if you are getting a reasonable price or not. If a high-quality project is asking too much (high market cap) compared to the stage of their development, it’s better to wait until it hit exchanges.
TIP: It’s very easy to see the basics at icodrops.com
Meet The Team
At an ICO you are sending your hard earned money to total strangers. Take the time to check the team members, a project that is not showing the team with full information on each member including LinkedIn pages don’t worth the risk. Always make sure you see the CEO on video in an interview or stream at least once to make sure it’s a real person. Advisers are also critical, make sure to check the veracity of advisory claims because many ICO’s have lied about this in the past.
Official Site and Public Behavior
Something that saved me a lot of trouble in the ICO space is being very picky about the design and aesthetics of project’s official websites. If the official website of an ICO doesn’t look 100% or their content is not well written and the idea behind the product well explained, I just don’t invest. Another thing is the way they conduct business. Are they responsive? how do they answer questions in Telegram? How do they deal With criticism in public forums? How did they handle a small crisis before the ICO? be vigilant and don’t participate in ICO that behaves unprofessionally or in questionable ways.
Ads, Sponsored Reviews and Bounties
When an ICO comes to your attention as an ad or sponsored review on youtube, be careful, outstanding projects with an active community and a healthy amount of hype don’t need to pay for advertisement.
TIP: If you like the project wait for the ICO to end and buy it at a discount.
Trust Your Instincts
A book that was a huge influence on me and really worth reading is “the gift of fear” by Gavin de Becker. Your mind is a complex system that’s is poorly understood, your unconscious mind process much more information than what your conscious mind can. Many people tend to disregard warning signs from their unconscious minds. You know that feeling went you don’t like a person without a rational explanation? More often than not life tends to prove you right.
TIP: If for any reason an ICO or the people behind it makes you feel uncomfortable and fearful, just trust your gut and avoid.
That’s it for now, I’m most certainly forgetting a few things and I plan to update and expand this one on the coming weeks, let me know If you have any good tips I can add.
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DO YOUR OWN RESEARCH I am a Just random dude from the internet. Make sure you own up to your decisions and take responsibility for any trades bad or good. I have no financial background and I am not a financial adviser (Never even finish my BA, and it was an art degree anyway ).
Thanks for reading and good luck in your crypto journey.