ICO (Initial Public Offering) is a method of raising funds for the development of new cryptocurrencies (or crypto-tokens). The start-ups or companies use ICOs to attract investors so that they can raise the sufficient amount which will assist them in the development of their project.
You can get these crypto-tokens at a low cost in the initial stage of development and receive better benefits than those who buy the currency later (this is true in general, but not always the case). Hence, both professional, as well as inexperienced investors, have been turning to ICOs to invest their money and make profits.
Now, what is so special about ICOs that they are becoming so popular among investors?
How are ICOs beneficial?
In this article, you will learn about all the benefits of investing in ICO.
1. High Return on Investment (ROI)
If you are thinking about investing in ICOs, then your chances of succeeding are relatively high.
The reason behind this is that their prices have a very high probability of increasing and it rarely comes down once it hits the exchange platforms.
When any coin hits the exchange platform, it is likely to get exposed to many long-term investors as well as short-term traders.
You can get some tremendous returns on your investment by carefully observing the successful track record of ICO transactions.
For example, Ethereum was launched in 2011, and its tokens were sold at $0.31. Now, the cost of a single Ethereum currency is $198 (as of 18 Sep 2018). In only seven years, its ROI has reached 64,000%. Tremendous growth, right? This gain is despite the recent fall all the way from $1,389
2. No boundaries – open to all
ICOs have no boundaries. Since ICOs are launched digitally, they are not limited to any specific geographical location. Therefore, they are open for international markets and to all the investors from all over the world. The international platform allows you to grow 20-25 times more than any other limited platform.
While researching ICOs, you will observe that the prices of ICOs are comparatively lower than that of IPOs. Hence, you only need a small amount to start investing!
You can invest in any of the active ICOs like Boomstarter, Network, Konios Project, CoinAnalyst, Dominium, FlipNpik, Fast Invest, Metabase, MedBlox, Ubex, BlockVest, Provoco, and many others. You can compare the prices and other details of these active ICOs by visiting their websites.
3. Early investing matters
As mentioned earlier, ICOs can spike in price quickly. Hence, investing in the initial phase of the development of cryptocurrency may be the best time. This is just before they are released into the general market where thousands of hungry investors go after the token.
For example, Monster byte, in July 2017, announced the pre-token sale at a price of $0.11 per token. All the tokens were sold out in just five minutes. They sold around 2.5 million tokens of their upcoming ICO. Two days later, they launched the ICO with great success. They sold more than 5 million tokens during the sale.
This example proves that early investing is a good idea for the investors. Even, a low-cost investment can get you a high return on investment.
Caveat: You should not invest more than you are willing to lose. Try to invest with such an amount that even if you end up losing that amount, it would not be financially drastic for you.
4. High liquidity
As compared to the traditional investments where the investment is locked in for a long period, ICOs offer high liquidity. You don’t have to sit for the whole show. In fact, you can choose to leave as long as there is a willing buyer.
And you don’t even have to sell at an exchange! Many transactions for tokens happen over-the-counter, means buyers and sellers connect privately for a one-off transaction.
Because of the high volatility nature of the coins, it’s possible to do flipping – buying and selling quickly to get a quick gain. You don’t have to worry about your investments being locked up.
5. Connecting with other experts in this space
In today’s tech-savvy world, it is important to get updated and connected with different entrepreneurs and businesses.
Crypto tokens are not a regular currency that we use in daily life. It is a type of new technology and hence not easy for an inexperienced as well as professional investors to fully understand how to use this technology and secure your digital tokens.
Because everything seems new in this world, you’d tend to find successful people in this space who can guide you along the way. In such a connected world, you can find them on Twitter, Discord, Slack and other social media platforms. You can even interact with these so-called ‘influencers’.
Typically for stocks, you won’t get that. You’d have no access to the CEO, the managers or the staff. They’re never going to advise you, much less speak to a small fry like you.
But not for crypto. In this space, this is a requirement!
If the developers and team don’t speak to you on any of the social media channels, the investment is good as gone. There won’t be trust, and without trust, no money will flow in!
This means that you have the opportunity to ask, learn, get in touch with the right people to move you along in this journey. It means you’ll learn to make better decisions and invest better with more information in hand.
6. Scope for exponential growth
The underlying driver for growth in the price of a cryptocurrency is adoption. If more people adopt the token to use for products and services, there is a higher likelihood of exponential growth, trust and popularity.
The whole idea of ICOs is this: When the final product launches and people like it, they will employ the tokens to use. If the use-case is good and viable, market demand for the token picked up and given a limited supply of tokens; the price goes up.
Given the advent of blockchain technology, there is a chance for exponential growth of these tokens, rather than the incremental growth of the traditional stock market. For example, 20% sounds awesome in the stock market, but you can see 20% change in the price of a crypto token daily and not blink!
There are several advantages of investing in ICOs. So, your best bet will be to have a diversified portfolio and invest in multiple ICOs simultaneously. So, even if you make a loss on one ICO, you can still survive for another day and go for another ICO.
All you need to understand is that if you want to make huge profits, then you have to be willing to leap.
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