Investing in ICO’s and actually turning a healthy profit

Its actually possible and not that hard.

There are two things you want to look out for when investing in an ICO and actually being able to turn a profit. The biggest one is staying away from getting scammed and the second one is not participating in one that is filled with so much FOMO and a high amount of capital raise (unless you have some type of in with the devs and can get in super early) that as soon as the token hits exchanges its fire sale city.

For example have a look at EOS, completely legit project and amazing people backing it.

EOS: A great project but heavily overvalued causing an intense crash after token listing.

A project could be completely legit and get so much coverage that everyone wants in. This is only beneficial to two types of people:

  1. Seed Investors
  2. The Developers/Team

Seed investors will usually try to recoup their investment and pass a fair amount of risk onto the people who buy in during the ICO or as soon as it hits the exchanges. Unless of course there is an explicit notice which states the seeders and team will stay vested in the project.

A massive supply of tokens is a big no no when it comes to investing in a successful and profitable ICO. There has to be demand, and the only way to create demand is to either:

  1. Have a working product so that the demand for token is immediately there and usable on a platform
  2. Not have a ridiculous amount of available tokens
  3. Have a cap on the maximum amount raised

Now that we have covered the legit part of ICO’s lets focus on what to look for when trying to figure out if an ICO is a possible scam or money grabbing scheme. The last thing you want to do is to invest in a “shit-coin”, as they are everywhere.

Some good basic resources to find out the legitimacy of an ICO:
Verified ICO’s
Picolo Research

Things you should look for when analyzing an ICO:

How does their web site look?
Some might argue here and say who cares about the web site quality but in all honesty, if they can’t code in the most basic programming language (HTML) or invest in a decent web site how can we expect they can write in Solidity or understand blockchain? We cannot.

How qualified is the team?
Are there knowledgeable people behind the ICO? Is there a track record on the team and business? Are there reputable advisers on their board? Always make sure the team is indeed real.

Is their social media inflated?
The last thing you want to do is be a part of an ICO who appears to be bigger than they really are. Anything that is inflated gives the wrong vibe, faking your fame is not cool. If they can fake their SM accounts think about what else they could be faking! Don’t hesitate to check YouTube, Facebook and all the accounts related to the ICO.

How much money is the ICO looking to raise?
It doesn't take 50 million dollars to create an alt coin. Make sure the project concept makes sense and is in line to the amount they are trying to raise. Ethereum did not raise 100 million dollars and their blockchain is fully functional and amazing.

Where is the company located?
In certain countries its harder to get away with fraud and scams. When looking for an ICO to invest in, ensure its operations are in a reliable and stable location. Not saying you shouldn't invest in one that is in an odd country, just be aware of what can happen.

And last but not least, if there are celebrity endorsements, that can be totally fine however, it can also be a distraction from the real product and business so make sure you do your due diligence on the company, foundation and product itself before investing.

Enjoy your investing!