3 Things to Know Before Launching an ICO
Most agree blockchain is here to stay. Even if ALL the other current cryptocurrency coins die, the technology will live on and revolutionize our world.
As you can imagine, this has created quite a stir for entrepreneurs. Much like in the Dot-Com era, there's a bit of a gold rush happening. People are flooding the blockchain market, hoping to build the next version of Facebook, Google or Amazon. But before you jump into your launching an ICO, there are a few things you need to know.
In today's post, we're going to look at three main considerations before your ICO. By the end of the post, you should understand where to go next, and what path you could take to get there.
Start a Legitimate Business
Before launching an ICO, you need to have an innovative and legitimate product idea or solution to a problem. You also need the business plan and resources to follow through on your proposal. There are so many ICOs on the market, competition is fierce. Some ICOs involve far-fetched ideas. If they do not have a solid business plan and a quality team of developers in place, they are unlikely to be successful.
Investors are looking for long-term investments that will increase in value. They want to see something revolutionary that has the potential to advance the blockchain technology and provide positive and scalable results.
Taking the time to determine the right product idea is worth the effort. It needs to be a robust design with real value. Your proposal should appeal to a wide audience of investors and be scalable so that it can hold its value long-term. The stronger your idea and its potential effects are, the better it will withstand market fluctuations. Building a strong business plan with a quality team of blockchain developers will give your business credibility. Providing a detailed, well-written white paper will also help you stand out from the competition.
The crypto world has been relatively unregulated and subject to scams since its beginning. Today with the increasing popularity of ICOs, regulatory bodies in different countries are paying more attention to blockchain technology. For example, the Securities and Exchange Commission in the US has started several investigations into ICO companies for federal security law violation.
Before launching an ICO you should research the industry and what the regulatory bodies stance is on ICOs and blockchain technology. This will help to avoid any compliance issues interfering with your success.
Get Ready for Wild Swings and High Volatility
The crypto market can be seen as the wild west, it is prone to wild swings and high volatility. With exit scams and pump-and-dump schemes only adding to extreme fluctuations, the market can be an intimidating place for inexperienced investors. The potential to gain high returns continually attracts investors though.
Limited regulation leaves the market open to market manipulation and bad tactics. Pump and dump groups artificially drive the price of coins up and sell them for profit. They usually target little-known alt-coins. It involves a large group of people buying up the coin simultaneously at a specific time. This makes the value go up rapidly. The coins are then quickly dumped by being sold off. The idea is ‘buy low, sell high’. The groups attract members by boasting that people who participate can make a quick return on their investment.
FOMO and herd mentality all contribute to the volatility of the market. There is a high percentage of inexperienced or new investors with short-term goals in the crypto market. The swings in the market can cause reactionary effects such as FOMO buys or panic sells. These can escalate many investors who are more focused on quick financial gains rather than holding their investments long-term.
It is good to be aware of these factors to be able to survive the turbulence in the market and maintain value. Having a solid business plan with strategies to adjust to changes in the market will help you preserve the value of your coins.
It's a Blue Ocean Full of Opportunity
With regulatory bodies putting pressure on ICO companies and the crypto market being highly volatile there is a sense of uncertainty regarding its future. However, it is widely acknowledged that blockchain technology is here to stay. The potential uses for this developing technology are numerous and vastly untapped.
There is a lot of hype and interest in the potential solutions and improvements blockchain can provide. It could revolutionize how industries work and how we deal with issues such as cybersecurity. With more regulation and future developments increasing investor diversity the market is likely to mature and become more stable eventually.
Entrepreneurs are excitedly flooding the market hoping to launch the next big phenomenon. The potential uses of blockchain have only begun to become apparent though. There is still so much to be explored. The innovative technology is still fresh and continually developing.
Thus there are plenty of opportunities to get involved. ICOs are a powerful fundraising tool. The opportunity to generate support and financial help from investors this way is game-changing for new startups. It can be crucial to get their blockchain idea off the ground. Although risky the potential returns are attractive for both investors and entrepreneurs.
Research into the market, your competition and any regulations you need to follow should be part of the preparation for any ICO launch. This will help make sure everything stays above board and presents your best ICO campaign to prospective investors. Presenting a high-quality white paper showing you have a legitimate business plan with an experienced team will help establish trust and encourage genuine investment in your idea.
Despite the less-than-trustworthy reputation of blockchain entrepreneurs, there are plenty out there trying to keep their promises and change the world. You can be one of those people, too. All it takes is a great idea, a stable business model, and the courage to start.