We can say that ICO (Initial Coin Offering) is an alternative crowd fund in the cryptocurrency market. Projects launch ICOs and offer their own tokens to people for a certain period of time at the ICO price they determine. The coins offered for sale in ICO are limited. They generally sell as much as the capital they need.
Why Do Projects Organize ICOs?
Projects have a specific goal. They need capital at the start-up stage in order to achieve their goals and offer people the things they want. Thanks to ICO, which is one of the ways to collect the capital they need in the cryptocurrency market, projects sell their own coins to people at a price they determine as a pre-sale. By purchasing coins, people not only make an investment for themselves but also provide capital support to the project in its initial phase. At the same time, one of the biggest reasons why they try to be successful in ICO is advertising. Projects that are successful by selling all the coins in ICO are talked about a lot among people, creating the perception that the project is really important.
What are the Benefits and Harms of Buying Coins from ICO?
When the coins we buy from the ICO enter the stock market, if the price is higher than the price we bought, this will make you a profit, but if the price is lower than the price you bought, you will naturally suffer a loss. That's why you should research the project you will invest in very well and carefully evaluate whether it will be successful or not. Not all of the coins put up for sale in the ICO may be sold and the project may not be able to collect sufficient capital, or conversely, the coins they put up for sale may be consumed immediately. Instant depletion of coins shows that confidence in the project is high, and people who fail to buy at the ICO price wait for the coin to enter the stock market and buy it if the price on the exchange is below or the same as the ICO price. This offers great opportunities for those of you who invest in ICO. You can sell the coins you have at a higher price than the price you bought them before.
Should We Participate in ICOs?
If it were in previous periods, the answer to this question would definitely be yes, but in today's conditions, 90% of the time, participating in ICOs will cause you serious losses. People do not invest in ICOs because confidence in the market has decreased after the prices of bitcoin and other coins have fallen significantly in the market. We would like to say this based on what we have seen ourselves. Currently, the majority of ICOs are traded on stock exchanges at significantly lower prices, such as 2 times, 5 times and 10 times the ICO prices. Naturally, investors who realize this wait for the coins to enter the stock market instead of purchasing them from the ICO. Since the coins that enter the exchange are usually much lower than the ICO price, they collect them from the exchange cheaper. That's why we recommend that instead of participating in ICOs, you should follow the projects you like and collect them at much cheaper prices when they enter the stock exchanges.
In general, if you like a project very much and believe wholeheartedly that it will succeed, you can buy small amounts of coins from ICO sales without taking too much risk. Don't get a job or give up a job under anyone's influence. Do your own research and make your own decisions.