ICO Investing: Everything You Need to Know

This market is exploding, and many players aren't too worried about whether it's a bubble or not. They want to get while the getting is good. If you’re thinking about getting into ICO investing, this article will cover what you need to know.

I do, too, if I'm honest. Who doesn't? It's an insane amount of money flooded into the interesting ideas of creative entrepreneurs.

But, if you're like me, getting started can seem intimidating. After all, I'm a writer, not a technologist. Jumping into cryptocurrency felt like entering a new world.

In today's post, I'm going to guide you through the ICO investing process. I'll take you from buying your first Ethereum to seeing your first return. By the conclusion, you should know enough to take the next steps. Are you ready? Let's begin...

Keep Tabs on ICO News

It’s good practice to research the market and see your options BEFORE you invest in anything. With the popularity of ICO’s increasing, the market is exploding. Both stories of success AND failure are regularly highlighted in the media. So, pay attention to the news, analyze trends and be aware of any scandal or issue to look out for.

Community websites like Reddit and Bitcoin Talk feature feeds discussing ICO news. Reviews from users serve as a solid springboard for comparing investment opportunities.

You'll see new ICOs released on a regular basis -- it can all get a bit overwhelming. Fortunately, there are various ICO Listing Websites with useful information on the new and upcoming ICO campaigns. Browsing these websites will help you keep track of campaigns and stay on top of new developments.

Perform Due Diligence on Potential Investments

So, you have found some potential investments that look interesting. But how do you decide which ICO to invest in?

This is where due diligence comes in. Do your own background research on the project and the team behind the ICO to see if everything checks out. You want to feel comfortable that you are putting your money in the right place.

A good place to start is the ICO white paper. This is a guide that every company has to write explaining what the project idea is, what it will do, the team involved and their plans for funding and development.

The amount of information and detail in white papers varies greatly. Some companies just create a very basic white paper. Others may be hard to understand if the information is more technical.

Another resource you can look at are websites like Crush Crypto. They provide detailed analysis and reviews of ICOs. This information can help you compare and judge the investment potential of different ideas.

Open an Exchange Account

Once you have decided on the ICO, you want to invest in you need to have cryptocurrency such as Bitcoins or Ether in order to start. A cryptocurrency exchange company, such as CoinBase, is one of the few places you can buy cryptocurrency with regular money (called fiat). Opening an exchange account enables you to deposit money with a credit card or bank transfer and exchange it for Ether.

Open Your Own Crypto Wallets

Having your own crypto wallet is essential. This is where you can store your cryptocurrency and is the private account you use when investing. You need to transfer your cryptocurrency from your exchange account to your personal crypto wallet to have full ownership and control over it.

When you open a crypto wallet you will get a Keystone file. This is your own individual private key. It is the ONLY way to gain access to your crypto wallet. So be careful not to lose or forget it!

Ether is one of the most versatile currencies as the majority of ICOs work with the Ethereum standards. Therefore you need to have a wallet that is compatible with Ether, Myetherwallet is one of the most convenient and popular choices.

To invest in an ICO you send Ether from your private wallet to the company and receive a number of the company coins/tokens back. The number of coins you receive will depend on the exchange rate that’s published.

Follow ICO Participation Instructions

For each individual ICO, there are specific participation instructions. The companies will provide a guide on how to participate. Be sure to follow the instructions to avoid errors and make sure your transaction is successful.

Flip Your Coins on Exchange

Once you have invested in an ICO and you have received your coins you can then buy, sell or trade them on cryptocurrency exchange platforms. This is the exciting part when you will hopefully earn that profit you have been dreaming of. The question is, when to trade your coins?

If you believe in the technology and think that it will increase in value over time, it may be worth holding on to your coins. Wait until the price goes up and you could multiply your investment. If you want to flip them quickly you can sell or trade them when they become available on the exchange.

There are many different exchanges to choose from. Some allow cryptocurrency and fiat transactions others only allow you to use cryptocurrency. Each exchange has its own policies and not all accept every type of cryptocurrency. Your level of experience, location and what currencies you want to trade will determine which exchange will best suit your needs.

Conclusion

Much like the stock market ICO investing involves a certain amount of risk and can be a gamble. However, it is an exciting opportunity and the potential to make money is huge. So if you are interested in giving it a try, why not go for it?

ICO investing isn't something to take lightly, but it IS something that we can all participate in. This guide should get you started, but make sure to read up on best practices and safety tips before investing any funds.

This post is simply a reflection of what I've learned, and should in no way be taken as legal or financial advice. Talk to a qualified professional before making any risky decisions.