How To Participate In Initial Coin Offerings (ICOs): A Guide To Investing In New Cryptocurrencies

People are instantly looking for new ways to get rich. We live in 2023, and crypto money today is as common as birds in the sky, so it may not be enough just to purchase some Bitcoins and wait for their price to suddenly skyrocket in a few days. To raise money successfully and in no time, you need to know what other options the crypto world may suggest. 

This is why you are reading these words now: this article is just what you need to discover what benefit you can get from the initial coin offerings. We will gladly share the secrets of tomorrow with everyone interested, so don’t leave such an opportunity behind! Now, you probably want to discover what an ICO is. So, let’s get to the details then, shall we?

Defining An ICO 🤔

First of all, let’s begin with a conventional definition. An initial coin offering (ICO) is a commercial operation based on creating a cryptocurrency to sell to investors to get financial gains for the company that issued an ICO process. Now, in simple words: it’s when a company makes a new crypto coin to sell it. So it’s kind of similar to initial public offerings (also known as IPOs) — in its objectives, at least.

It is a commonly known fact that investors buy stocks in different companies to earn money by selling them later when they rise in price. However, in the case of initial coin offerings, things work a bit differently. Investors buy a new cryptocurrency issued by a company they invest their money in, hoping that this particular company will rise to the top and their crypto coins will become as profitable as, for example, Bitcoin. 

Surely, these new coins can have some software or service utility. However, they are still pretty dangerous to invest in, especially if the investors have little to no experience in crypto trading. But if you’re skilled enough, crafty, smart, and have a good crypto portfolio, you will quickly tell a potential money-maker ICO campaign from a miserable scam.

The Way It Works ⚙️

It all starts when a company wants to raise more money and learns about the crypto trade. A simple need for a simple organization, what else to say? Seriously speaking, it takes a lot of effort and market research activities for any company to make its own ICO campaign. It takes even more effort to make such a campaign profitable for the company and potential investors. Let’s take a closer look at the details.

Different sides of the same coin

ICO can be structured differently, depending on its creators’ logic and objectives. There are three possible options known:

• Static supply / static price. In this case, a company sets strict limits on its new crypto money quantity and price. It’s somewhat similar to buying shares, but with the only exception that you get a new crypto coin instead of a share.
• Static supply / dynamic price. In this case, the amount of new tokens is fixed, but the price is not, and the aforementioned tokens get more and more expensive if the investors choose to buy them.
• Dynamic supply / static price. This is kind of vice versa to the last option since the investors’ actions determine not the price of a new crypto token but its quantity.

If the money-raising objectives have been completed, all the new crypto coins join the other existing ones in the crypto market. On the other hand, if the campaign turns out to be a failure, all the money spent on the new crypto can be returned to the investors.

What is white paper, and what is its purpose

After the ICO is structured and ready for business, it needs a promotion campaign. It’s hard to sell your goods if nobody knows you’re selling, so to speak. This is why every ICO should have a so-called white paper containing all the information about a new crypto coin is presented to anyone interested.

Such sort of a pitchbook explains the most crucial things the investors may want to know:

• The main objective of the ICO campaign
• The amount of funds the project requires to be successful
• The number of new crypto tokens that will remain inside the company
• The currencies accepted for buying the new crypto
• The amount of time the whole campaign will take
• And many more things deemed valuable to share with the potential investors

In the case of ICO, investors and a crypto-creating company commonly use cryptocurrencies that already exist to buy the newly created one. Or, likewise, it can use fiat money.

Thus, a white paper is a tool that helps inform and encourage potential investors to buy a new crypto token. So, any company needs to spend enough money on such a promotion since it determines the future success of a whole ICO campaign.

Who can launch an ICO?

Just about anyone; it’s simple as that. Anyone can begin an ICO campaign since the legal tools of control over the crypto world are scarce and, as a rule, do not work properly. You just have to know how to make your crypto coin, promote it, and handle the results of your independent activities.

The problem is that since anyone can do such a thing, it takes a lot of experience and research to know who to trust. For example, suppose a big and trustworthy company decides to try its luck in creating its own cryptocurrency. In that case, you probably won’t get ripped off if you decide to invest in what they offer during their ICO operations. But what if some shady guys with malicious intent put a lot of cash into promoting their initial coin offering campaign? Such cases are about to be avoided at all costs. Sadly, the same rule applies to young and fragile companies since their open-minded and fair efforts often fail.

How to participate in an ICO safely?

If you are eager to try your luck investing in a new cryptocurrency, there are some rules to follow.

First of all, you should know more about the company that began the ICO campaign. Furthermore, you should thoroughly investigate every single detail. What were the company’s financial activities in the last years, what other people say about its reputation, who is in charge of that company, and how intimidating its law-breaking history is — you should completely trust those you are dealing with.

Next, you should know the company’s experience with crypto trading. If it welcomes all sorts of internationally trusted cryptocurrencies in its operations, it will probably be able to handle its own. There should be at least someone in charge of the company who works directly with crypto and does it successfully.

Also, you have to be sure about how trustworthy the ICO’s objectives are. If a company is good and reliable, it clearly defines every goal it has, presenting fully-detailed and completely understandable white papers.

Another important thing is the ICO’s legal basis. Since crypto trading is virtually unregulated by any sort of legislation, investors should control the legal obligations that present themselves.

At last, make sure that during the ICO, all the funds will pass through escrow wallets. This will guarantee you almost complete protection against any scam activities.

Learning to Deal with ICO in the Right Way ✍️

Acquiring the ICO cryptocurrency is relatively easy for everyone skilled enough to work with crypto. However, if you are eager to get professional and are interested in joining an ICO campaign — we are glad to provide you with the best advice on this page.

Getting a reliable crypto wallet

This is a crucial thing that you should do first. Like any sort of other currency, crypto money has to be stored somewhere. The place is a reliable crypto wallet, precisely speaking. Check the customers’ feedback and official reviews on different options, choose the most trustworthy one, and download it (don’t forget to also check for a browser extension and a mobile app).

Then you just have to register and set all the parameters up. When your crypto wallet is ready, you can safely begin your crypto-related activities to discover how to initiate coin offering operations. You probably know how to buy tokens, right?

Getting a base cryptocurrency

To get some new crypto, you need some trusty and internationally-known tokens with moderate liquidity and volatility. They are required to make the initial purchase. By the way, however unsatisfying it may sound, you actually have to get yourself a crypto portfolio if you want to be sure about the future success of your crypto ventures and know how to buy ICO crypto tokens. But that’s just a friendly reminder, not an obligatory thing. But a strictly recommended one, though.

Choosing a decentralized exchange and buying ICO crypto tokens

A decentralized exchange (DEX) is where you can trade your crypto with other crypto money. So, it is essential to check the reviews and choose the right one where you would feel completely comfortable.

When done, now it is time to learn how to buy ico tokens. Simply look them up at the decentralized exchange. You just have to trade a share of your trusty crypto money for an ICO crypto. When the new coins will appear in your wallet, you can consider the job done.

Types Of Initial Coin Offerings

An ICO can be private or public. And it is very easy to learn the differences.

Private ICO

This type is for a fixed number of accredited investors. The company that creates new cryptocurrency shares it equally among predetermined buyers, with a fixed price. The investment amounts are also strictly fixed.

Public ICO

This type is for the general public. It gets really crowdfunding-like in this case since literally everyone can become an investor. However, the risk of instability here is very high because the new tokens are distributed without any control. If some of the investors will get too much of them, the others may lose their interest and get rid of the new currency they recently acquired.

The Rules Of Attraction 📊

There are some reasons why ICOs still remain popular, although there are multiple examples of negative results, obvious scams, and myriads of unsuccessful crypto campaigns. Again and again, start-ups and wealthy companies worldwide are trying to raise money by creating their own crypto coins. But honestly speaking, it’s for a reason. 

• First of all, crypto money can be easily created and distributed among investors (compared to bonds, for example). Tokens demand no ink to be printed, no legal restrictions to bypass, and are transferred instantly. A pretty positive set of traits for a lucrative startup, right?
• Crypto money knows no boundaries. So no matter where exactly the investors are physically located, the tokens they have paid for will reach their crypto wallets in no time. Rather a comfortable fact, considering the relatively poor state of modern international politics, which are in a state of constant fever. 
• Crypto coins also lack legal restrictions. So, the investors can participate in ICO from every country in the world (if there is a stable Internet connection, of course). No one will be obliged to do any unnecessary law-related routine.

A Friendly Reminder 👋

There were many uncanny situations in the past when different ICOs were thoroughly promoted by famous people like DJ Khaled. These campaigns managed to raise millions USD, eventually becoming shady scams. 

So, beware when you see lots of hype and suspiciously looking for excessively positive recommendations by washed-up celebrities or retired athletes to participate in some particular ICO. Serious companies don’t try to impress potential investors with cheap tricks.

Always remember that every ICO is a very risky business, not backed up by legal regulations, and utterly unpredictable by its nature. Flirting with disaster can be fun sometimes, but this option won’t work in your favor when you want a stable income and comfortable profits. So think twice and again if you think about how to do initial coin offering.

Conclusion💡

Initial coin offerings are pretty controversial. They can make you rich in no time when you know what you are dealing with, and they also can leave you financially devastated if you fail to take precautions. Luck also is a rare guest in ICO campaigns since success mainly depends on the token-creating company’s efforts and overall financial stability. And if you have been asking yourself, “Can US citizens buy icos?” then the answer is yes. Even though all the risks, there are currently many ICOs for US citizens and investors from Asia and Europe. 

Despite the risk, you must know everything about crypto trading if you consider yourself a real professional. And ICOs are an integral part of the crypto world and modern economics. Moreover, when you know how to ICO successfully, you can raise additional money for yourself and also can help others to understand how it works. It always feels good to be a catcher in the rye, you know.

In this article, we have outlined every detail of a successful ICO participation process. If you will do the proper research, will make yourself a set of crypto trading rules, and will work according to these rules, your wealth will get the maximum protection. And you will get richer if luck is on your side.

FAQ 🌐