Investing in an ICO is a great way to purchase a cryptocurrency at a very affordable rate. ICOs tend to offer steep discounts for early contributors, allowing you to purchase a cryptocurrency for much less than it will be listed for following the ICO. Unfortunately, while many cryptocurrencies introduced via ICOs are successful, there are also numerous failures. By asking yourself the following questions before investing in an ICO, you reduce the risk associated with your investment and increase the chances of making a nice profit.
The very first thing you should ask yourself is whether the project that the ICO is raising funds for has a good use. If it seems like something that has been done before or you do not think it will gain much traction, do not invest in the ICO. If, however, it seems that the project has far-reaching applications and could potentially revolutionize a certain industry, you may want to pursue it.
One of the earliest things you need to ask yourself is who is on the team behind the ICO. The lowest investment risk will come from ICOs with a team that has already achieved success. If they have successful projects under their belt, they will likely be able to deliver on the promises of their ICO. If, on the other hand, the team has numerous failures in their past, you may want to consider a different ICO to invest in. If you cannot find any information on the team, there will be an element of risk, so you will need to carefully consider the ICO based on the other factors.
Even if the project seems genuinely useful and the team has a strong reputation, you may not want to invest in an ICO if the token does not play an important role. The token’s value will not increase if it is simply used for fundraising and does not play a role. There are exceptions to this, such as projects that have a scheme in place to reward token holders. But if there is no clear reward in place for token holders and the token does not seem relevant to the project, there is no point in owning it.
Don’t forget to also consider how the project will use the funds raised in the ICO. You want them to have a clear outline of the planned use for the funds. Make sure the planned fund usage aligns with the roadmap and project goals.
You also need to ask yourself whether the project has a roadmap and whether it seems realistic. You want the ICOs you invest in to have a clear plan for the future; otherwise, there is no way to measure success. Ideally, the road map will already have several steps completed, and the future goals will seem feasible.
With the above considerations in mind, you should be on your way to choosing an ICO to invest in that has a great deal of potential for success and returns.