Crypto Initial Coin Offerings (ICO): What Every Investor Must Know

Whether you’re getting involved with an existing crypto or even an Initial Coin Offering (ICO), which acts as a fundraising mechanism for new projects, understanding who is on the development and management team is one of the most important things to know.

But first, just what is an ICO?

Simply put, an ICO involves the creation of a new virtual coin or token by a company looking to raise money.  Typically, companies using ICOs to raise capital have generally been start-ups that use blockchain technology as part of their business model to provide a service or product, like Bitcoin or Ethereum.

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However, it doesn’t matter how attractive the coin or offering may seem, don’t proceed without research.  Failure to do so can lead to disaster and potential scam.

For example, it’s often a red flag if the team behind it does not have any named full-time developers. Additional caution should be taken if none of the team has any domain experience.   If at any time, an ICO team is unwilling to identify itself, be very cautious about investing at all. 

Also, if members of the team claim prior association with universities or companies, double-checking with reputable third-party sources can provide the facts you need.

ICOs will also list advisory people on their sites, too.  Be sure to verify they are legitimate.

According to Fast Invest:

An ICO's website should feature details about the team that created the entire concept. A hard-working team will proudly present the members and showcase their abilities or contributions to the project. If you have to actually research and Google about the team behind it as there is no information on the website, that’s a big red flag.

Another crucial source of information for all ICOs is the whitepaper — the document that outlines the mission, technical details, team and other crucial details behind the venture. While your average investor may not have the technical background necessary to understand every inch of the whitepaper, most legitimate projects to offer key points in an outline. 

At all times, you should have full access to information before investing anything.

If you barely understand what the ICO is about and there are no resources or communication methods to find out more, forget about it.

Investors must also be sure the ICO has a list of their funding and development goals in a clear timeline.  If this information is not readily available, it could be an indication the team does not have a clear long-term plan for the project, and may only be motivated by short-term riches.

The whitepaper should include all the terms and conditions of the ICO.

After reading it you should know how the ICOs clear potential. Some of the most reliable ICOs also have online customer service support to answer questions.  ICO projects may also have Telegram accounts set up that the public can join, which can help potential investors get a better sense of how the project is developing. 

By doing such due diligence, you begin to uncover with crypto coins may be the most valuable.

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