In the Crypto market, besides investment forms like buying and selling Bitcoin, Altcoin, participating in ICO projects is a very worthwhile option for new investors. With the right approach and strategy, you can reap substantial profits. Let’s explore ICO further through the article below:
What is ICO?
ICO (English term: Initial Coin Offering) refers to the first coin issuance, a form of fundraising within the Crypto community, specifically:
Investors buy coins issued by the project, and then the project returns to investors a corresponding amount of coins based on the invested amount at the pre-set exchange rate.
Before an ICO, projects typically need to provide the following information:
- The amount of funds needed to raise
- The number of coins issued
- Coin exchange rate
These parameters help investors make informed decisions whether to invest in a particular ICO project or not.
Reasons Why Many People Want to Invest in ICO?
Many are eager to invest in ICO because they see potential investment opportunities, expect the project’s coin value to increase after launch, and believe the profits can be very large. In the past, ICOs were mainly for angel investors, but now ICO projects are accessible to everyone with just $100 starting. Despite the inherent risks, the tremendous successes of some projects—similar to Facebook, Google, or Amazon—cannot be denied.
Who Can Participate in ICO Investment?
ICO investment is open to all, but here are some criteria for those who should not participate:
Lack of trust
If you do not believe in Bitcoin, Altcoin, or other coins in the Crypto market, you should refrain from investing. Without trust, your decision-making will be uncertain and uncomfortable, greatly affecting your investment outcomes. You might consider other investment channels like stocks, forex, or gold instead.
Not accepting risks
The cryptocurrency market can deliver high profits but also involves significant risks, and ICOs are no exception. If safety is a priority and you cannot accept risks, carefully reconsider your decision to invest in ICO projects.
Lack of patience
Patience is crucial for success in all fields. Remember, “Money is not created or destroyed naturally; it only shifts from impatient pockets to patient ones.” Develop persistence and patience before engaging in any investment channel.
Laziness to learn, research, and analyze
The crypto market is highly volatile and unpredictable, requiring skills in prediction, analysis, information update, and market understanding. If you lack time or are reluctant to learn, you should avoid ICO investments to prevent unnecessary risks.
How Much Money Do You Need to Invest in ICO?
This is a question many investors concern before deciding to join any ICO project. The pricing policy varies among ICO projects; generally, the minimum investment start is 0.1 ETH (equal to approximately 130.10 USD per ETH at the time of writing).
So, 0.1 ETH = 130.10 x 0.1 = 13.01 USD.
The amount of coins you can buy depends on each project; some may have limits, while others are unlimited (Public Sale). For projects with purchase limits, exceeding the limit or not following policy might result in no further sale of coins to you.
If you want to buy more, look for pre-sale (wholesale) rounds of the project. However, consider carefully as even with discounted prices, your coins may be locked for 6 months to a year to avoid price drops caused by large holders selling all at once.
If you want to invest but lack funds, explore options like bounty and airdrop.
ICO – Risks and Opportunities
Participating in ICO projects is often viewed as having more potential than guaranteed profits. Let’s objectively review the risks and opportunities:
Risks
Legal issues
Before investing in an ICO project, understand the legal implications. For example, in Vietnam, using BTC or other Altcoins for trading or transactional purposes might violate the law, risking legal responsibilities.
It is legal to use cryptocurrencies for trading, buying, or holding to profit, but always research thoroughly, especially if residing in other countries, to avoid legal trouble later.
Official documentation
ICO projects offer no legal protection, and risks are high: the development team might disappear with your funds or misuse the capital. Check all information about the management team, development, and business structure to ensure safety and credibility.
Price manipulation by whales
Large holders, known as whales, can manipulate prices, especially in coins with high trading volume.
To mitigate this, prefer ICO projects with trading volume exceeding 10 million USD and remain calm, avoiding FOMO and FUD.
Security
Theft by hackers is possible. To reduce security risks:
- Keep private keys confidential
- Enable two-factor authentication (2FA)
- Verify website URLs carefully before login
- Log out after using
Opportunities
Despite the significant risks, the profit potential from ICO projects is considerable. For example, late 2017 saw profits of 5x to 10x, with many investors earning huge returns.
All investment channels carry risks and potential opportunities; disciplined risk management (like stop-loss), consistency, and confidence in your decisions are key. For ICOs, choose reputable projects with trustworthy development teams, demonstrated by real persons and results, and trust your judgment when making decisions.
Investment Strategies for ICOs
Strategy 1
Buy ICO tokens and hold until the project succeeds, accepting “all or nothing”.
Strategy 2
Buy ICO tokens and sell when the price reaches a certain increase point. This is a “quick trade for quick profit” strategy.
Strategy 3
This combines strategies 1 and 2: buy ICO tokens, then sell part of your holdings when prices rise to recover your initial capital, while holding the rest until the project succeeds. This “slow and steady” approach ensures both capital and profits are protected.
Strategy 4
Similar to strategy 3, buy ICO tokens, wait for prices to rise, sell to recover capital and some profit, and hold the remaining tokens until project success. This is a safer strategy for risk-averse investors.
Capital management strategy
Develop a capital management plan to limit risks and optimize your profit-to-assets ratio. Record your experiences after each investment, diversify your funds across different investments, and stick to your plan.
Conclusion
The above is an article about “What is ICO?” and the unbeatable ICO investment strategies for 2020. Hope it provides valuable information, and I wish you success with your ICO projects!
See more: What is IEO?
