Throughout the whole year we all have been hearing a lot about cryptocurrencies and ICO. Based on my own purchase experience I would like to give you some tips.
Thus, any purchase of cryptocurrency coins is associated with the ICO analysis process and with the selection of a suitable investment. Here I would like to warn that these advice are for those people who do not have a large amount of money, I mean, not more than $ 10K, because for big investors the “rules of the game” are quite different.
1.What ICO I dislike immediately?
Very large projects with good PR and famous personalities among the advisors or in the team (advisors usually participate in very successful ICO in different positions). These are good ICOs but not very profitable.
Large institutional players earn the most money in this kind of projects, as they receive more tokens than others due to the discount they get from the ICO project because of the major investment. Consequently, they can sell their tokens making good profit, even if the price of the token is greatly reduced. It turns out that having invested more than others, they risk less than the others.
These projects have large budgets for advertising, they can post marketing materials on any top cryptocurrency source and attract investors not with the quality of their project but with well-done and expensive marketing activities.
- Projects without a solid basis in the form of a current business or MVP with very large hardcaps.
As a professional who has worked in finance sector in the past, I clearly understand that if a company sells 50% of tokens for $20 million, that means than the total cost of all tokens is 40 million. So, if the company does not have anything but pure plans to create the product, then such an estimate is virtual and a token is totally overrated when we speak about the whole period before the launch of the product as well as the launch of tokens in the system. Furthermore, it is hard to expect that after the ICO a token will grow 10 times, because in this case capitalization of 400 million should take place.
What ICO do I like?
I will give an example of GVT tokens, that I purchased about 2 weeks ago.
I bought about 100 GVT for 0.3 Ether at the exchange rate at the time of the deal that was about $ 115.
Currently the cost of tokens has increased to $ 651. Obviously this cost is still virtual and exists primarily on paper; nevertheless, there is the liquidity of the token, so if necessary, you can always get the profit.
It is a good return on investment for 14 days, isn’t it?
What criteria did I use when choosing?
1. Beautiful name of the project and the tokens
It might seem to be a strange criterion, but in the cryptoworld the same naming rules as in business work. The simpler and more sonorous the name is, the more successful it is. In this regard the story of the ICO of our CPA network Adpump is rather interesting. The name was not related to the cryptomarket when the business was launched. At the same time, after having started working with blockchain, we were told about good naming multiple times, taking into account that the title has the word Pump. In the professional traders slang it means pushing the price up or “pumping”.
- Low hardcap
The amount of attracted to the project investments was $ 2,836,724 for 75% of the sold tokens. Therefore, the overall estimation of the company was just a bit under $ 4 million. In this case the company has a large growth potential.
- An interesting business idea with a strong team
I am deeply convinced and business practice has proved that even if the original idea is not realized by 100%, nevertheless, the team might be able to build a successful business.
So what do I regret about? Oh, yes, I regret having invested so little into these tokens!