Home Editors Choice How To Analyze ICO Tokens For Potential Investments

How To Analyze ICO Tokens For Potential Investments

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ICO Analysis
ICO Analysis

 A n ICO is a fundraising method that trades cryptocurrencies which have an instant liquid value for future crypto-coins. Typically, a fraction of the tokens is sold out to ICO participants and a proportion is kept for the company’s requirements like private investors, etc. An Initial Coin Offering permits both big and small investors to endow in the projects they like.

The last year came with thousands of flourishing ICO stories. The incentive for the investors of the ICO is that the worth of the token would be higher (or much higher) than the price of the token during the ICO.

ICOs are really sizzling among the crypto investors. Recently, Filecoin and Hdac collected respectively surprising amounts of $258 and $275 million. At this point, it is also essential to mention less successful stories like the Mycelium ICO. Its team members just vanished after raising the money, and later it was stated they used the funds to pay for their own vacation. The lack of guidelines might be one of the reasons it happened. Just days ago, millions were stolen as CoinDash’s ICO started. Just before the beginning of the token sale, their site was hacked and the ICO wallet address was altered to the hacker’s address.

The success of an ICO is subjective to many aspects. Are you aware of the fact that almost anyone can design a white paper, set up a landing page & attach a wallet address?

Yes, that’s true. And because of this reason, anyone who opts to invest in a crypto market should be very careful to avoid being a victim of scams. This doesn’t imply that there aren’t any legit companies offering an ICO (Initial Coin Offering); however, it does signify that the investor should keep a keen eye on the marketplace

This editorial will discuss the main keys to pay focus on when estimating an ICO investment.

  1. Research on Upcoming ICOs

Look at resources or outlets that mark the latest ICOs. Knowing the ICOs which are going to come will enable you to plan in advance, especially for ICOs that have a whitelist. This means that you have to enroll beforehand to take part in them, which are usually trademarks of popular ICOs that have a limited number of coins to offer. Here’s a list of various resources for ICOs:

  • Community Forums/ Sources that feature ICO discussions
    1. Reddit
    2. Bitcoin Talk
    3. Slack
    4. Twitter
  1. Know about MVP

A minimum viable product (MVP) is the trimmest version or a product with a minimum set of features, enough to satisfy customers’ needs.

In general, it is a prototype with an alpha or beta version of the future product. It is utilized as a trial version that will help to make modifications in the project. Yet it’s not the common thing in the crypto world, but if it’s available, it definitely increases investors’ confidence in the product.

An MVP has three key characteristics:

  • It has an adequate value that people are eager to use it or buy it initially.
  • It signifies enough future benefit to holding early adopters.
  • It offers a feedback loop to show upcoming expansion.

An open code allows seeing if the company has any groundwork. You can check the functioning of the concept described in the whitepaper and the progress of work.

  1. Pay attention to the social media

With so many ICO’s launched on to the marketplace, it is essential for individual projects to attract ample amount of attention towards their product. The best method to judge this is by the marketing efforts of the company.

Are they active on the different social media platforms like Facebook, Twitter, and Medium? Do they have a presence in significant cryptocurrency forums like GitHub and BitcoinTalk? And what kind of information are they putting out there? These are all important questions that should be kept in mind while comparing ICO’s.

  1. Consider crypto experts’ opinion

Yes, it’s important to consider crypto experts opinion because it is one of the essential factors to look at the time of rating ICO’s.

They would broadly consider the same criteria but from the different perspective like.

Team: Teams with relevant cryptocurrency knowledge are generally considered much stronger than entire industry novices. This involves development, coding, project management, community management, and marketing. The existence of an advisory board will further enhance the reliability of a particular project.

Product information: ICO usually has two different aims.

  1. Providing financial support to a completely new concept.
  2. Providing fund for the expansion of an existing project or to move it onto a Blockchain-based network.

The second one is more likely to see success as it is based on an already proven product or service. Therefore, experts are going to favour these projects. A service or product that points out a genuine problem in the marketplace would also enjoy a higher rating.

Business know-how: Projects with the clearly defined long-term goal, a fixed plan on how to achieve it, and the amount of investment necessary to get there is more likely to see success. Experts will also pay attention to whether or not there’s an already existing user base and if a competitive analysis has been done to better understand the playing field.

Marketplace robustness: The ICO industry is predominantly unregulated. This can transform at any minute and the different legislature can be enacted in different regions. A project with the flexibility to adapt & overcome the changing marketplace circumstances should receive a higher comparative rating.

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