How do you choose the best ICO’s you want to invest? The crypto market is replete with thousands of ICOs, and every month hundreds of new ICOs with new concepts and latest technology are being added. In this frequently fluctuating and highly volatile investment market, investors find it quite tough when it comes to choosing the best one.
While for the regular ICO investors, it may be easier to decide which ICO they should choose to invest in, for the new investors, it is not as easy as it looks. The situation becomes more complicated when the ICO that they choose to invest in involves highly technical details and some of these details are beyond their understanding. ICO marketing guide is very helpful to analyze the current ICO market and the competitors.
However, by using a little common sense and performing due diligence related to the particular ICO, you can determine whether or not it is a good project and you can make a solid investment decision.
Besides, there are certain key things such as an ICO’s project idea, white paper, business model, roadmap, competitors, third-party reviews, ratings, communities, transparency and a lot more that you must take into account prior to making your decision regarding how to invest in ICOs:
One of the first things that you must consider prior to investing in an ICO is to know and understand the idea behind the ICO project. Ask yourself, does it create value to users and is it worth it? Understand why the blockchain and token is needed. Is it worth decentralizing? What potential does it have in terms of market size? If you are satisfied with the answers to these questions, you should take a proper insight and move ahead to read their white paper.
Read the white paper
Every ICO comes with a white paper. Generally, this is a 20-40 page pdf file where you can find an in-depth account of the ICO that you want to invest in. It tells you all you need to know about an ICO coin or token. It even details the problems the particular ICO is seeking to resolve, the technical details of its development, and what the team standing behind the ICO plans to offer post funding.
Remember, all white papers have different information, a different market, and a different audience to target. Finally, it is only your common sense and intuition that will help you ascertain whether or not this is a good ICO to invest in.
Since a white paper often comes with multiple audiences, you need not be surprised if it has some highly technical sections. It is quite normal. On the other hand, there are certain white papers that are full of fluff and instantly raise a red flag.
After having been through its details, you will have a better sense of the company’s industry, competitors, founding team, and development roadmap. =
By understanding the business model of an ICO, you will have a better idea of how its coin/token is going to perform in the future. Why has it launched its token? Why has it not used the traditional models? You need to know all this because many of them are doing an ICO just because it is an ICO. You can also get more information by attending ICO events which are organized specially for those who planning to launch their own ICO project or want to invest in a сrypto-currency token. The ICO countdown has already begun for this token.
Follow (stalk?) the founding team on LinkedIn
The best structures are always built on solid foundation and cryptocurrencies are no different. Before you decide to support an ICO token/coin, you must first know who you are going to be associating with. For an ICO to run successfully there must be a dedicated team behind it. The team members must be professional and sufficiently experienced.
A few more questions that you should ask prior to investing in an ICO are as follows:
- What is their professional experience?
- What companies have they worked for?
- Which schools have they graduated from?
- How long has the company/team been together?
- How much experience do they have in working with blockchain/cryptocurrencies?
- Is the CEO of that particular ICO experienced in leading technical teams?
- Are the team members and the CEO of the company active on social media, forums, etc.?
- Do they have a history of conflict?
Review the roadmap
Another essential piece of information that you must know to become an informed investor is to read and review the roadmap available in an ICO company’s white paper or their site. The roadmap must detail what the company has completed in the past and what it plans to do in the future. It should give the timeline during which it aims to achieve its pre-set meaningful milestones.
These milestones differ based on the objective of the company but must define what will be completed during and post ICO. Just because a company has a good idea does not indicate that you should invest. Be wary of investing in a company that does not have a working prototype or at least a solid team behind to do that.
Last, but certainly not least, in the roadmap and white paper, you must try to find out when the new coin is going to be listed on an exchange. Irrespective of how good the company or idea is, the payoff is generated when you are finally able to exchange the new coin for a profit. That applies to securities token. At utility token case, the actual utility achieved with having those tokens can itself be worth a lot.
In an ICO project, a hard cap means to make a total supply of the generated tokens/coins. This amount is fixed and an ICO company releases this information prior to the launch of the ICO. It is noteworthy that the fund raising for the coin distribution can never go beyond this amount.
Why is a hard cap important for an ICO project and why should you consider it before investing in an ICO project?
Scarcity is what best describes the concept of a hard cap in an ICO. Just think of diamonds for a few seconds, the scarcer they are, the more their value increases. The same applies to cryptocurrencies. It is just like the process of demand and supply. If there is a limited supply of a specific token, the value of the coin/token may also increase over time.
This, in turn, will safeguard the value and integrity of the underlying network. However, there is a very clear balance in getting this number right. The lower the funds an ICO company receives, the later it will be able to develop and grow the network.
In case the network does not succeed in achieving the set target, the value of the coin/token will dilute, therefore leading to a deteriorating drop in the value and integrity of the network.
You must have seen projects raising hundreds of millions of dollars with no set objective of what to do with all that money. There are examples of ICO startups that have set a funding target of USD20 million but then jump to raise more than USD200 million because they could not set a hard cap. There is no pre-defined plan for more than 20 million USD. In case the raised funds are not used to work in effective way, particularly within young startups, you will never find their expected ROI.
When you think of investing in an ICO, from the competitors’ point of view, one of the first key points to be noted is whether the competitors of your selected ICO succeeded in completing the project. Does the ICO you are looking for have the features that its competitors have or something different? Is it using the same technology that its competitors use, or does it have the technology advantage over others?
Quality investments are essential not just for the investors but also for the ICO issuers. This is because every ICO project wants to present its project on the basis of merits. Reviews are immutable, reliable, and reflect genuine feedback from users. They are in fact a central point for developers and analysts, most importantly because they can be essential to the development of a trustworthy ICO market in the future.
A review can make or break the reputation of a brand no matter how big or famous it is. The third-party reviews play a very crucial role especially when you want to access a company’s services and buy its products.
In the crypto world, when you think of investing in an ICO, you should read the third-party reviews before making the final investment decision. Reading these reviews, it will give you useful information outside of the ICO’s own production and help you to make an informed investment decision. Before investment, you can also view our Free ICO Planning Guide to know more about planning and strategy.
Rating means evaluating an ICO based on the four big criteria: its team evaluation, product evaluation, token economics, and business evaluation. The rating also helps in evaluating the overall quality and viability of the ICO project. ICO Ratings enables you to get an overview of past ICOs and how successful the raise and ROI was. So, when you think about investing in an ICO, check and compare the ratings of that ICO with other ICOs like UbiatarPlay, DIW, Koios, XYO, working on the same technology, with similar projects to help you decide if you should invest in this project.
Just as you need to take the team, white paper, competitors and other key factors into account, likewise, existing members of an ICO will help you to make the right decision in ICO investment. However, you need to ascertain if the number of members the ICO claims to have in its communities is real or fake. The more followers an ICO has on social media platforms such bitcoin talk, telegram group or even its normal social medias such as Facebook, Twitter and LinkedIn, the more reliable it will be for investment. ICO community management will assist the company to choose various communities and channels to advertise and promote the ICO projects to the right audience. So, make sure when investing in an ICO to check if it has a genuine pool of followers in its community or not.
Transparency means hiding nothing from investors. When an ICO hides nothing from its investors, they are easier to trust. Before investing in an ICO, you should therefore ascertain that the developers are not anonymous, and there is 100% transparency in terms of their names, business plans, locations etc. Moreover, check if the ICO you have chosen to invest in is easy to contact or not. You should be able to contact them when you are in need of any information concerning their project.
Finally, transparency holds utmost importance when it comes to trust in the digital currency world. As an ICO investor, it is your right to know every possible detail about an ICO project. Every piece of information will assist you in taking an informed investment decision. Similarly, Influencer marketing is a powerful route to market for your ICO, where well known brand campaigns reach engaged audiences.
All these concluded, going through step by step all above mentioned parts of an ICO you should have pretty solid picture whether that ICO is worth investing or not. Hopefully this information helps you to make better decision on your ICO investment career. Remember to check out our other helpful articles about ICO investing and the recent projects in ICO scene. Typically best ICO’s to invest is listed at our trending or you can have firsthand information about new ICOs and services such as BunnyToken, Seal, Streamity, Upline,by signing up our email list. You’ll get our weekly updates most easily from there.