If you are new to trading but are open to taking a little more risk, then Initial Coin Offerings (ICO) could be for you. Offering the opportunity to be one of the first people to buy brand new cryptocurrency.
Many people try to play it safe and invest in established crypto tokens but taking part in Initial Coin Offerings can be extremely beneficial, as long as you do your research.
In this article, we will provide an overview of what an Initial Coin Offering involves, how to take part, notable ICOs in the past, and how to purchase established cryptocurrency should you decide an ICO isn’t for you.
What Is an Initial Coin Offering (ICO)?
Similar to an Initial Public Offering (IPO) in the Stock Market, an ICO is the initial sale of new tokens, usually via a crowdfunding event to encourage investors – this is how a new cryptocurrency company raises funds to support their new token.
This is preferential for the cryptocurrency company as they do not need to sell shares, which would mean losing a percentage of their ownership. Meanwhile, new investors are able to purchase the new tokens at the earliest possible stage, with the hope that they have made a solid investment.
How Can I Take Part in an Initial Coin Offering?
To participate in an ICO you generally need to own an established cryptocurrency such as Bitcoin or Etherium, if you do not already own any cryptocurrency, then they can be purchased using a cryptocurrency trading platform, for example, with the inx.co platform. We will discuss these crypto platforms in more detail later in the article.
Once you have made an investment via an Etherium or Bitcoin trading platform, you can then transfer your tokens to a wallet where they will remain secure. You are then ready to join an ICO.
The token sale will start at a set time, allowing you to send your cryptocurrency to a specified address in return for the new tokens, be warned that some of these sales can end very quickly.
You will receive your tokens either; immediately after the sale ends; in a few days; or you will be required to manually redeem your tokens.
Always read the terms and conditions before participating in an ICO.
What Were the Most Successful ICOs?
The fortunes of Initial Coin Offerings have been mixed, so research is always advised before making an investment. However, there have been many ICOs that have been highly successful.
Ethereum – Recording outstanding success and currently standing as the second-largest cryptocurrency in the world, Ethereum’s ICO was groundbreaking, selling for $0.31 each and now trading around $3,000.
NEO – An open-source blockchain project from China, earning the nickname of the ‘Chinese Ethereum’, it was one of the country’s first major players in terms of smart contracts and decentralized commerce.
The ICO was backed by the Chinese Government, Microsoft, and other market-leading companies, and the initial buying price was just $0.03, later reaching an all-time high of $180.
NXT – This was one of the earliest Initial Coin Offerings (2013) and also garnered great success. The token initially sold for $0.0000168 which earned the developers $16,800 in Bitcoin payments, helping them build on their platform. NXT later peaked at $2.15 each.
Alias (previously SpectreCoin) – Launched in 2016 as a cryptocurrency that specialized in privacy, Alias gained huge worldwide attention for its ability to be traded with anonymity. The coin has still yet to become a mainstream player, but the signs are good, reaching $0.15 in late 2021, from an initial buying price of $0.001.
Ark – Ark uses its own blockchain for easy integration with other cryptocurrencies, promising excellent efficiency, decentralization, and being a truly international platform.
Ark could be purchased for $0.04 at the ICO, since hitting a high of around $11.
What Are the Main Benefits of an Initial Coin Offering?
So now you know what an Initial Coin Offering is, what are the major benefits?
- There are no limits to who can buy tokens. Unlike an IPO, an ICO is open to everyone, with no regulations on who can make a purchase.
In terms of the US market, only 3% of the adult population can take part in an IPO as they are required to have a net worth of at least $1m, whereas 100% of US adults can take part in an Initial Coin Offering.
- Purchasing new cryptocurrency is also instant, with almost no barriers preventing an investment once the token has been launched.
- There are no global limitations when it comes to purchasing cryptocurrency or security tokens, therefore sales are not limited to the token’s country of origin.
- The extremely liquid market means investors can see potential profits within minutes, meaning quick gains can be made. However, like any investment, focusing on the long-term is always recommended when crypto trading.
- An ICO presents a great business model that can reward investors almost immediately, providing a win/ win scenario if the token gains popularity and success.
How Can I Buy Established Cryptocurrency and Digital Securities?
A regulated cryptocurrency and digital securities trading platform is the only recommended method of purchasing tokens, offering real-time prices and, most of all, strong security.
Crypto and security token trading platforms provide a bridge between you and the market, allowing you to enter the world of trading with peace of mind.
For people who are new to the world of Bitcoin trading or trading of any type, you can also opt to use the services of a dedicated account manager who can walk you through the process and make no-obligation recommendations.
Using a trusted and regulated trading platform means your money and your tokens are always safe and trades can be made instantaneously to secure the best price.
If you are looking for a best-performing crypto and security tokens list before making a trade, then there are many online resources for up-to-date analysis.
Thank you for reading and good luck in your crypto trading endeavors.