Quick And Easy Guide To Initial Coin Offerings
(How To Invest In ICOs)
Learn how to participate in ICOs with this step-by-step ICO guide. Also, find out how to pick the best ICOs for maximum ROI and what you should look out for before investing…
Since I began writing about investing in cryptocurrencies, many people have been asking me to write an ICO guide.
I suspect that the interest in ICOs will only explode exponentially in the coming years – so if you’re reading this now, congratulations for being early and having a great head start!
We already know that cryptocurrency is the greatest wealth creation tool we have ever seen in human history (as I’ve emphasized repeatedly on this blog). ICOs take things to a whole new level. Except for a small group of very early adopters – the folks who bought Bitcoin at $100 or Ethereum at $5 – most crypto millionaires make most of their wealth from ICOs instead of regular trading.
That’s the secret they’re hiding from you.
As I tell the guys in my Crypto Coaching Program: If you want to make thousands of dollars, tens of thousands of dollars, or even hundreds of thousands of dollars – you can just trade normally on exchanges like everyone else.
But if you want to make millions of dollars (while this crypto gold rush is still ongoing) – you have to participate in ICOs.
Mandatory disclaimer: The views expressed in this article are my personal opinion and not financial advice. You should do your own research and due diligence. Never put in more than what you are willing to lose.
What Are ICOs?
Initial Coin Offerings (ICOs) are basically a democratization of traditional Venture Capital investing.
In layman’s terms, you invest in up-and-coming crypto tokens BEFORE these coins are being traded on regular exchanges. These projects are usually at an early stage of development and they are using ICOs as a form of crowdfunding.
Naturally, this is considered a high risk and high reward form of speculation, even within the crypto world. In my personal opinion, the potential rewards greatly outweigh the potential risks, which is why people are participating in ICOs.
Imagine being able to invest in the next Uber or Twitter when they are still in their first year of business.
In the past, such opportunities were only reserved for wealthy investors or people with the right connections. Blockchain technology has democratized this – allowing the masses to enjoy a piece of the action.
While buying a good coin on the exchange may net you a 5-10X return, great ICOs can bring investors 100X or even 1000X returns. Click here to see the ROI of some of these projects.
Of course not all ICOs are superheros from the Marvel Universe. In fact, due to this easy and unregulated manner of fundraising, there are dozens of new ICOs being launched every single day. Not surprisingly, a vast majority of them are either outright scams or projects that cannot be delivered due to incompetent teams.
How To Participate In An ICO
So you want those tremendous returns from ICOs?
Here is a quick and easy ICO guide to get started.
Note: Every ICO has their own process and they may differ from the steps I’m about to outline. The process below is just a general one that would apply to MOST (but not all) initial coin offerings.
STEP 1: Do intensive research on upcoming ICOs.
There are many websites that list upcoming ICOs, such as ICO Watch List (note that it’s not an exhaustive list).
In the next section of this article, I will list some of the things to look out for when picking a good ICO to invest in. Just know that you need to do A LOT of research. Reading a project’s White Paper should be the bare minimum due diligence you’re doing.
STEP 2: Purchase some Ether (ETH)
Currently, the majority of ICOs (I would say about 90%) accept contributions via ETH. Some may use other tokens such as BTC or NEO.
The easiest way to purchase ETH is from Coinbase.
STEP 3: Whitelist/KYC
Most projects nowadays require prospective investors to go through a registration process beforehand. This can start as early as one month before the actual token sale/ICO.
Make sure you find out the relevant information and dates in advance. A Whitelisting/Know-Your-Customer (KYC) process usually involves uploading images of your passport/national ID, selfies of yourself, and other documents. Only those who have cleared this process will be allowed to participate in the ICO.
The Whitelist/KYC period may be closed on a predetermined date, or it may be closed once they have received sufficient registrations.
STEP 4: Preparation – send ETH to your own wallet
After you have passed the KYC (they usually inform you via email), you should prepare by sending your intended contribution amount of ETH from the exchange to your own wallet.
For ICOs, you MUST use a wallet that you control (the easiest one to use is MyEtherWallet, which only takes a few minutes to set up), NOT wallets on exchanges such as Coinbase or Binance.
STEP 5: Actual day of ICO/token sale
On the actual day of the ICO, all you need to do is to camp in front of your laptop. Popular ICOs are known to be sold out within hours (or even minutes), so be fast!
Once the token sale starts, send ETH (from your MyEtherWallet account) to the contribution address of the ICO. The coin you just bought should automatically show up in your MyEtherWallet account. You can keep it there until the next step.
Each ICO usually has their own step-by-step guide, so make sure you follow their specific instructions.
STEP 6: Wait for exchange listings
Now you’re done. Give yourself a pat on the back.
Keep an eye on social media (Twitter, Reddit etc) for announcements on when your new coin will be listed on exchanges.
In the mean time, you might as well sign up for an account on Binance (the biggest exchange in the world) because that’s probably where most coins will be trading.
How To Pick Good ICOs To Invest In
Selecting ICOs is a tricky process and almost every investor will have his or her own unique set of criteria.
In this section, I will list some of the basic things you should look out for – these are my personal criteria based on how previous ICOs have turned out.
(A) TEAM LEADERSHIP/ADVISORS
Who are the leaders of the team and their prominent advisors?
What is their work experience, qualifications, and track record?
(B) STRUCTURE OF ICO
How much is the ICO trying to raise? Raising too much money during an ICO limits the future price growth of the coin.
Are there HUGE discounts given to pre-sale/private sale participants? Some projects give out ridiculous 50% to 200% bonuses to private investors who later dump their coins when they are listed on exchanges.
How far along is the project? Has the team been working on it for some years or did they just assemble a few weeks ago to make a quick buck?
Is there already a Minimum Viable Product or is everything just theory in a White Paper?
(D) TOKEN UTILITY
What is the token used for?
How would the token gain value (apart from speculation)?
How large is the targeted market? What is the growth potential?
Are there existing/better competitors out there trying to do the same thing?
Is there substantial excitement surrounding this project? Mentions on social media or mainstream media?
Or are their marketing efforts non-existent (nobody knows about this project)?
Is the leadership team open and transparent about what they are doing?
Do they answer questions from the community or try to engage followers?
That basically sums up the 7 important factors to look out for when you do your research.
Specific recommendations of ICOs are reserved for my exclusive group of private clients as these literally take hundreds of hours of research & analysis to produce.
Conclusion: My Personal Tips
I will just conclude with two simple tips.
1. Go with the Dark Horses. Some of the best ICOs are those that fly just under the radar. They may even barely sell out during their ICO. Avoid the over-hyped ones.
2. Ask them something on social media. See if they reply. If they don’t reply my tweets/messages, I’m taking my money elsewhere. I have passed over numerous promising ICOs because of this. Look – if they don’t even bother replying you BEFORE you give them your money, don’t count on them replying you AFTER you’ve handed over your money and something goes wrong!
FURTHER INTERESTING READING:
Coinbase (for Bitcoin, Ether)
Binance (for everything else)
Let me know if you’ve found this ICO guide useful. If you want to join the fight against the traditional banking and governmental establishment, you can spread the word about cryptocurrency by sharing this article with 3 friends who would benefit from this.