Cryptocurrency is a high risk, high reward investment. There are tons of options out there in the market. But before getting carried away by the prospect of huge returns, it is important to keep it in mind that not all of them would taste success in the longer run.
So what should a newbie investor consider before deciding to invest in an upcoming ICO? Let’s find out 4 useful tips which would ensure that your hard-earned money is invested in the right ICO.
- Know the People Behind the Scene
It is critical to find out the people behind an initial coin offering. Are there real people working on the project or is it just a scam to be unfolded in the near future? Is there any notable crypto advisor behind the scene? Is there any prominent private venture investor involved in the project? When was the company floated and how good is the track record? It is always better to invest in a company that has been around in the market for a while and has known faces in its payroll.
- Understand the Target Market
The target market is another important aspect to consider. Not every market is crypto friendly. Knowing the market that the company is targeting would give you an idea of what challenges are to be expected and what opportunities might arise in the future.
- Nitpick the Whitepapers
Whitepapers are meant to serve as the promotional pitch to prospective investors. Ideally it should be well-written and thorough enough to provide the investors compelling reasons to get hooked. A quality whitepaper indicates that the company has done its homework right. Going through the minute details could prove useful in revealing the company’s intentions, as well as the project’s viability.
- Keep a Close Watch on Crypto Communities
Before investing, spend your time researching well-known crypto communities like BitcoinTalk or CryptoMinded to find out the general consensus about the ICO among seasoned investors. An ICO that has vibrant community discussions is highly likely to survive on the longer run. Look out for relevant press releases, advisor interviews and podcasts to gain insightful information. Presence on social platforms and sustained communication with potential investors can also be a pretty good indication of the company’s intentions.
The Bottom Line:
The key to pick the right ICO is to perform due diligence. Knowing the people behind the scene, identifying the future roadmap and understanding the target market can help you figure out the true potential of the ICO you are looking to invest in.