There are a number of ways to make money with cryptocurrencies. All methods come with some risk though some come with greater risk than others. ICO or initial public offerings are one of the riskier ventures. For those wondering, the reason people still invest in a risky venture is simply that the rewards can be larger compared to less risky ventures. The following are a few tips to help reduce your risk when investing in ICOs.
White Paper Evaluations
It is important to learn how to read white papers or the company’s pitch in written form. What you want to see is a detailed proposal that focuses on the vision and services that are going to be offered. You also want to read how these services will work along with special features that investors might be privy to.
Be sure to read about the development details regarding the cryptocurrency. For example, you will want to see names of developers, which will be discussed in greater detail later. It is vital that you fact check stats if they are mentioned to make sure the company you are considering is not exaggerating as this is a sign of trouble.
Pay Attention To Developers
Creating a new token is no easy task. It requires a lot of coding and knowledge about blockchains. You want to make sure you minimize the risk of investing in a developing token that is being created by developers who actually know what they are doing. The white paper will likely highlight the team behind this particular project.
It is your job to research all of these individuals to see what other projects they have helped launch. Be sure to read up on what cryptocurrencies these individuals created to see if they were effective or successful. This type of information should reduce your risk. Be sure to stay away from companies that choose to withhold the names of the developers of the cryptocurrency or their positions.
Value Beyond The ICO Token
Investing in ICOs has become more and more complex. There was a time when it was okay to invest in companies that did not offer anything beyond the price of the token to investors. This is no longer the case as the number of cryptocurrencies grew.
You now have to make sure you pay attention to the long-term value of the token you are thinking of investing in. Sure, the goal is to buy tokens that are going to increase in value when introduced to the world, but you have to find ways to cover your investment. You can do this by investing in a company that is offering additional services or products in exchange for tokens just in case you aren’t able to make a monetary profit.
Stay On Top Of ICOs
ICO investing has gotten very competitive. You need information about a particular startup and time to properly evaluate this information before others get a chance to do so. This means you need to make sure you sign up for companies that will update you about potential startups that will release ICOs or pre-ICOs as soon as possible.
Being alerted ahead of time gives you enough time to properly evaluate each company so that you can make an informed decision while beating other investors, too. Being informed late could make you feel like you are missing out on profits, which could cause some panic. Of course, panic can lead you to make ill-advised decisions, which could be risky, so this is another way to stay safe.
ICOs and pre-ICOs give you the opportunity to make a lot of cash, but you have to be careful. Hopefully, some of these pointers make it easier for you to take better chances, which may get you closer to your goals. Do not forget to read what other investors are saying about the ICOs you are considering for additional insight.
If you are interested in even more cryptocurrency-related articles and information from us here at Bit Rebels then we have a lot to choose from.