After the boom of ICO projects that first flared up in 2017 and began to cool down in 2018, it became apparent for all private and institutional investors that the choice of potential objects of investment is rather enormous and requires a meticulous and in-depth analysis.

There is nothing complex in this process for professionals — they have the expertise and analysis tools at their disposal. However, for private beginner investors, choosing a cryptocurrency or token to invest in has become much more complicated. The 2017 method of blind investments is no longer effective. Today, what directly determines your return on investment is thoroughness, awareness and feasibility.

Let’s try to define the characteristics that are worth paying attention to in order to distinguish between promising cryptocurrencies and scam coins, as well as explore the Zichain’s BAMP — a blockchain-enabled toolkit for convenient and profitable investment in cryptocurrency funds that is a part of the Zichain ecosystem.

Which cryptocurrencies are growing, and which are not

If you are not chasing the excess profits, but instead rather go for predictable and secure investments, then you should focus on the top cryptocurrencies in terms of capitalization. Such approach will ensure a conservative risk and profitability ratio for the asset portfolio.

If an investor does not wish (or is not able) to invest large sums of money, but stills desires to have a chance to multiply their profit, then they should focus on the cryptocurrencies that are valued below 1 USD. Cheap coins are volatile and have a great potential for growth. A cryptocurrency, which is worth 1 USD today, can grow up to 10 USD in one day, but if it is worth 100 USD, it is rather unlikely to grow to 1000+ USD in one day.

Another important factor that is becoming more significant with time is the ability to use the coins as a means of payment that replaces traditional fiat money. With the increasing interest of the general public to the industry, it becomes clear that replacing money in its classic and usual form with its digital counterparts is no longer regarded as something from a sci-fi movie by many. Taking this trend into account, the most promising currencies are those with a low transaction cost, high conversion speed and ease of use for the general public.

The key factor here is compliance of a new cryptocurrency’s technical specifications with market demands. Monero took off due to the increasing need of complete anonymity, Ripple became successful thanks to the high transaction speed and protection from DDoS attacks, Ethereum became the top second cryptocurrency in terms of capitalization thanks to the creation of smart contracts and establishing a platform for development of tokens issued during the ICO. If a new cryptocurrency offers solutions for any pressing needs of a large part of the Internet audience, it has a chance to top the capitalization ranking charts.

Since it is almost impossible to determine the real value of cryptocurrencies, you should be partly guided by the hype that surrounds it. If a digital currency is newsworthy and serves as a topic for discussion in a variety of circles, then you should regard it as a possible investment object and research it more closely.

Selecting promising ICO — key principle

Today the ICO boom has calmed down — the all-encompassing hysteria that virtually has not left a single investor from the digital economy sector indifferent, is now subsiding. The reason is not that a bubble has burst or a pyramid has collapsed; it is just that ICOs offer way too many projects to choose from. The selection task has become much more complex.

Some are involved in ICO projects in order to support interesting teams and products and help developers who create exciting and valuable projects. This is a familiar and common motivation for crowdfunding that moved into the realm of ICOs. But if the primary investment objective is to earn money, then you need to find a comprehensive method for selecting such projects, whose tokens after being placed on the exchange will start to grow and significantly gain value in terms of the price, for which you bought them at the fundraising stage.

When assessing the prospects of the ICO, professional investors analyze:

• product’s relevance,
• team members and their experience,
• stage of development,
• project’s objectives and ambitions,
• whitepaper,
• monetization model,
• calendar development schedule,
• distribution chart for received investments, etc.

But all of them primarily provide an opportunity to understand the model, according to which tokens will build up in value, and from where the value will emerge.

If there is no clear understanding why people who will use the product after it is fully developed will feel the need to purchase the tokens, then there is no guarantee that right after the ICO, the coin price will not decrease.

If we try to understand post factum the reasons for the success of virtually all ICOs that multiplied the return on investments, it turns out that in all cases, the issued tokens first and foremost did not just have a speculative value, but rather the value arising from the need in the tokens of the product’s users.

Tokens should be relevant not only at the fundraising stage as shares of the project, but also after the release of the product as an integral part of the established ecosystem. Otherwise the company launches the ICO just for the sake of it, which does not promise anything to investors who have invested money in the project.

When evaluating a project, try to predict its future and imagine how the turnover of tokens will be arranged in it — namely, why would anyone buy them, how they would be used, as well as how high a demand for them could be. When you understand where from and how the value of coins is formed, you can very accurately predict the rise or fall of the prices of tokens after their initial listing on the exchanges.

Funds for investments on BAMP

Everyone wants to invest in the cryptocurrencies that caused a great stir last year and that continue to be promoted today, but not everyone has the opportunity and tools for conducting a professional analysis and making the correct decisions when selecting an investment strategy.

Investment funds are an important component of the cryptocurrency industry, thanks to which the total capitalization of the entire sphere is growing every year. By pooling assets from a variety of private investors, funds can provide them with an access to investments that are not available to individuals either due to the legal reasons and artificial restrictions on the part of ICO organizers, or due to a high threshold for joining the project against the backdrop of low budgets of individuals. Consolidation of assets in the funds under the management of professionals helps to overcome these restrictions.

Zichain’s BAMP is a tool for managing customized investment funds in the crypto world, which opens up possibilities for making profitable investments to anyone; and for professional investors it offers the possibility to earn on creating and managing own funds by the means of charging fees.

BAMP platform is based on the blockchain technology and uses smart contracts for completing transactions. Investing in cryptocurrency funds using BAMP is safe for investors. In addition, investors can rest assured that their funds are managed by a qualified professional. The platform architecture is created so that the algorithms of the relationship of managers and investors do not cause disputes and leave both parties satisfied.