How can you earn money with an ICO?
When launching an ICO, a new cryptocurrency is introduced. By purchasing the right new cryptocurrencies, you can make a lot of profit. However, there are also significant risks involved, as many cryptocurrencies ultimately end up worthless. In this article, I will discuss how you can earn money with an initial coin offering (ICO).
What is an ICO or initial coin offering?
The abbreviation ICO stands for Initial Coin Offering. An Initial Coin Offering is offered by a company that wants to launch its own cryptocurrency. To make this possible, money is needed. If you invest in an ICO, you invest money in a cryptocurrency that does not yet exist. In return, you receive a certain amount of this non-existent cryptocurrency.
At launch, you are one of the first to own a certain amount of this currency. By launching an ICO, a company can raise enough money to create a new cryptocurrency. The advantage for you as an investor is that you are one of the first to own this new currency.
What is an ICO exactly?
How can you earn money with an ICO?
When the new cryptocurrency becomes popular, you can earn a lot of money from it. The value of the cryptocurrency increases, allowing you to sell your crypto to other people for much more money.
An ICO always has a certain closing date. After the closing date, it is no longer possible to invest in the ICO. If you have invested in a popular currency and the ICO is over, many people will want to buy your coins.
Watch out for the risks!
Investing in ICOs is definitely not a get rich quick scheme, despite what many influencers on the internet may say.
Only the best new cryptocurrencies will experience a significant increase in value. There are also many ICO scams where a malicious party manipulates the value of a new cryptocurrency. The value can suddenly increase without a good reason behind it.
What should you watch out for in an ICO?
Do you want to invest in an ICO to hopefully make a lot of profit in the long run? Then it is important to invest your money in a good ICO. The better the ICO, the higher the profit you will make from your investment. Below are three general tips to invest in a good ICO.
Read the whitepaper
Before you invest in an ICO, it is important to thoroughly read the whitepaper. Within the whitepaper, you can read about the purpose and strategy of the new cryptocurrency.
How to make money with an ICO?
When a new cryptocurrency becomes popular, you can earn a lot of money. The value of the cryptocurrency increases, which means you can sell your crypto to other people for much more money.
An ICO always has a specific closing date. After the closing date, it is no longer possible to invest in the ICO. If you have invested in a popular cryptocurrency and the ICO is over, many people will want to buy your coins.
Be aware of the risks!
Investing in ICOs is certainly not a get rich quick scheme, despite many influencers on the internet selling it as such.
Only the best new cryptocurrencies experience significant value growth. There are also many ICO scams where a malicious party manipulates the value of a new cryptocurrency. The value can suddenly surge without a good reason behind it.
What to look for in an ICO?
Do you want to invest in an ICO to hopefully make a lot of profit in the long run? Then it is important to invest your money in a good ICO. The better the ICO, the higher the profit you make from your investment. Below are three general tips for investing in a good ICO.
Read the whitepaper
Before investing in an ICO, it is important to thoroughly read the whitepaper. Within the whitepaper, you can read about the goal and strategy of the new cryptocurrency.
The whitepaper should also always include a roadmap with concrete goals. Some whitepapers introduce an interesting idea, but do not provide a strategy or plan. It is therefore important that the goals in the whitepaper are both achievable and measurable.
The team
Do extensive research on the team behind an ICO. For example, does the team already have enough experience in the cryptocurrency landscape?
Be aware that some companies even use fictitious people within the team. It is therefore important to be very critical of every ICO.
The idea
Also, research whether the cryptocurrency really offers something new. Many cryptocurrencies are variants of existing cryptocurrencies. Only when a cryptocurrency really adds something new is there added value. If it is just a simple copy, the cryptocurrency is likely to fail.
The economic value of the token
Also, research whether the token really has a function. Many companies issue tokens to raise money without actually providing a function.
It is also important that there is a limit on the number of tokens that can be sold. When the developer can create new cryptocurrencies unlimitedly, this can put significant pressure on the value of your own tokens.
Conclusion: Can you make money with an ICO?
You can certainly make money with an ICO, but it is important to be very vigilant. A large part of the crypto scams in recent years were related to an ICO. It has become increasingly easy for anyone to launch a cryptocurrency and there is not always a valuable plan behind it. Investing in an ICO is therefore not suitable for inexperienced crypto investors.
