7 tips on how to assess ICO projects and make smart investment decisions
Not too many words gained as much popularity in the last few months as the word cryptocurrency. As the price of Bitcoin rose well above $10,000, everybody started talking about digital currencies and the investment potential in this field.
In such circumstances, a lot of new companies decided to base their operations on blockchain technologies. To put it simply, Initial Coin Offering (ICO) became a cornerstone of their business. In this article, we will show 7 tips to effectively assess ICOs and choose the best solutions for your investment.
What Is ICO?
An ICO represents a means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies. In other words, developers use ICO to sell a certain amount of initial tokens in exchange for already-established cryptocurrencies like Bitcoin. Doing so, they obtain the starting capital to move on with the project development, while investors hope to capitalize on the future success of this venture.
7 Ways to Evaluate an ICO campaign
According to cryptocurrency analysts at rushmyessay.co.uk, there are dozens of ways to assess whether an ICO campaign has success potential. Since most of these methods require superb IT knowledge, it is best to focus on simpler but accurate ICO indicators. Let’s check out 7 most revealing features to look for when assessing an ICO here:
- Take a look at the backstage
The first thing to do when evaluating an ICO project is to look for the people who started it. You should check their professional background and previous experience. Have they launched similar campaigns before? Were these projects successful? You must know these things before making an investment.
A vast majority of promising ICO projects clearly present resumes of the persons in charge. If you can find links to their social network profiles, it would be a huge bonus. This kind of transparency boosts investors’ confidence and suggests that you can trust the professional authority of team leaders.
- Evaluate ICO’s market potential
Each ICO campaign has a different purpose. Your job is to analyze the entire plan, especially whitepaper as the project’s core document. This way you get to see what kind of problem will this product solve and does it have enough potential to make a breakthrough. You should compare it with similar projects and determine what makes it so different from others, both positively and negatively. Once you’ve done this analysis, you’ll have a much better idea about its overall market potential.
- Consult online communities
You can find almost anything on the Internet, including online communities with relevant cryptocurrency discussions. Such places are full of IT experts who can really open your eyes and reveal important information about ICO projects. They can give you valuable suggestions and even save you from fraudulent projects. Bitcoin Talk is one of the most prominent websites in that regard but you can look for other digital forums if necessary.
- Analyze mutual communication
An ICO campaign should have clear and measurable goals. If you can’t grasp the basic objectives of this project, chances are there aren’t any and developers just want to rip off investors. If you notice that they change stories often, provide you with vague answers, or communicate poorly, you should stay away from such partners. A good ICO team is always ready to present project development, knowing that it’s the best way to attract credible investors.
- Check the trial version
Reading about the product is not the same as seeing it in action. Serious entrepreneurs should be able to present you a working tested product to strengthen the credibility of their project. Alpha version is supposed to be developed to some extent, enough to convince investors that it has enough potential to advance quickly. At the same time, it allows you to compare real work with whitepaper plans and determine if everything is being done as planned.
- Who are other investors?
You can never be too sure about ICO campaigns, even if they gather a lot of investors in early stages. For this reason, you should also analyze businesses or individuals who already made their moves and invested in this project. Ask yourself – do I know these people? Are they highly authoritative blockchain stakeholders or some random guys you’ve never heard of before? If you think that the project gathered a bunch of suspicious investors, perhaps you should skip this one and find a more credible ICO to support.
- Mind the risk factors
Some project features clearly suggest that you ran into the ICO scam. First of all, you should never trust developers who promise you a huge return on investments. Nobody can guarantee such thing and it’s the basic sign of a false ICO campaign. On the other hand, a well-planned ICO takes care of potential investors and guarantees a refund in case of failure. If they urge you to make an investment as soon as possible, they probably just want to take the money and run away.
The team at TotalCrypto.
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Conclusion
Initial Coin Offering became one of the most popular business models in the last couple of years, thanks to the incredible rise of Bitcoin and other cryptocurrencies. But if you want to invest in ICO campaigns, you need to learn how to recognize the ones that really have market potential. In this article, we showed you 7 ways to assess ICO projects. Keep our tips in mind and feel free to leave us a comment in case you need additional information about this topic.