What and Why – ICO Investment
Bitcoin investors and enthusiasts anxiously await the release of many iconic Cryptocurrencies. Many plan to come to life in 2018, presenting themselves as ICOs. Upon release, these cryptocurrencies will offer investors the first opportunities to invest. These investments are at a low price, creating the potential for a sizable return. Here’s the full story of an ICO investment:
The world saw an increase in popularity as well as the number of Bitcoin investments in 2017. It has piqued investors’ interest levels. In fact, according to an article published by Forbes, the Bitcoin price increased above the price of gold in early 2017. After eight years, the cryptocurrency market is nearly in full swing. 2018 is promising to be the most explosive year yet.
So, what exactly is an ICO, and why are ICOs worth the investment? Read on to learn more about ICOs, what they are and how they work. As well as the potential risks, and why 2018 just might be the best year to make your first investment.
What Is an ICO, and Why It is Worth the Investment?
An ICO is an Initial Coin Offering. ICOs are also referred to as “crowd sales”, which is a form of digital currency. ICOs or “crowd sales” offer startup ventures and entrepreneurial projects a new way to acquire financing via the blockchain space. Startups and entrepreneurs attract investors to their projects in exchange for bitcoin.
The first ICO became available in 2013, and the number of bitcoins soared into the thousands. Then, in recent years, ICOs have gained popularity and have stemmed from the creation of new blockchain projects. Ethereum quickly became one of the most well-known projects. In fact, in 2014, Ethereum raised millions of dollars by selling cryptocurrency in an to fund and launch its application and platform.
What Are the ICO Opportunities?
ICOs are a decentralized way for blockchain startups to acquire funding for their new projects. This is without having to go through more traditional financing routes, such as acquiring a loan from a traditional lending institution. It is an option that has dwindled significantly in the last decade. ICOs offer startups a viable way to acquire financing that they otherwise may not have been able to acquire… It also offers lucrative investment returns for investors in a relatively short time, making ICOs a win-win for both parties.
Investing in ICOs offers investors the advantage of earning significant returns and within a relatively short time frame. Some investors saw returns within only a few months.
For example, as mentioned above, Ethereum became of the first and most successful ICOs on the cryptocurrency market. In 2014, the initial Ethereum price was $0.30. Then, the price exceeded $50 less than one year later.
What Are ICO Risks?
However, as with any type of investment that has the potential to earn a high return, ICOs certainly have their fair share of risks, which is important for investors to consider prior to making an investment in a new venture.
There are a lot of positives backing ICOs. Although, one of the reasons why they are so popular and successful thus far is because transactions are largely unregulated. This is because financial managers are trying to determine the best ways to manage and regulate the world of cryptocurrency. Currently, there aren’t any legal consequences if investors lose funds after making an ICO investment choice.
Some of the most common risks include errors in processing funds, cyber identity theft, digital currency theft and even fraud. All of these scenarios could potentially result in a loss of funds. Unfortunately, the cryptocurrency market also has its fair share of ICO scams. In fact, some startup founders have taken off with investors’ funds. Therefore, it’s important for investors to conduct their own research. They need to do their homework prior to investing in any one ICO.
Furthermore, there is also a market risk, which is a risk that is present with any type of investment. Although many projects have resulted in significant returns, ICOs do not come with a guarantee that it will succeed. It isn’t granted that the token value will increase. Again, performing due diligence is necessary.
ICOs in 2018 and Beyond
Finally, an ICO investment has quickly become a proven option. It has also become the answer to portfolio diversification and maximizing returns. An ICO investment has also proven to provide substantial returns. The type of returns that clearly extend beyond the typical returns seen with traditional investment options. As mentioned above, any investment that may yield a high return will have its own set of risks to consider. Therefore, it’s important for investors to do their research. Investors must verify that startup ventures are legal entities before making an ICO investment decision.
Investors should also keep in mind that ICO regulation will likely change in the future. It can potentially have negative effects on an investment. This type of investing activity takes place on a digital cryptocurrency network. It encapsulates the risks of fraud, scams, and cyber theft. In an effort to reduce the risk of losing funds, avoid investing in any one ICO project.
Investors who accept some level of risk may be able to increase investments. In some instances by up to five times more than their initial buy-in, and in a shorter amount of time. As a result, an ICO investment is a strong investment option in 2018 and beyond.