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Initial Coin Offering (ICO) 101: Definition and Strategies

If you have follow the latest trends regarding cryptocurrency and technology in general, you surely have heard about ICO. This term stands for Initial Coin Offering, a method through which one can set the basis of an entirely new cryptocurrency coin. Starting a cryptocurrency project from scratch involves the distribution of a certain percentage of the initial coin supply. This distribution is handled by people who are interested in the future of this new project, called supporters/backers. Then, the supply goes to people who gave money for the project development process. The first ICO dates from the apparition of Ethereum. Following their example, many cryptocurrency projects later followed.

 

Participating In anico

There are several rules to respect when desiring to participate in an Initial Coin Offering. The first one would be investing in a personal wallet, preferably a hardware one. Hardware wallets for storing cryptocurrency are much safer than the ones based on Cloud technology. Secondly, in order to understand ICOs, you have to know what IPOs are. IPOs, standing for Initial Public Offering, represent the stepping stone of the apparition of ICOs. To make the difference between ICOs and IPOs clearer, think of ICOs as crowd-sales that use digital tokens to sell/trade shares, while IPOs should be perceived as stock trading inside a company. ICOs are all about cryptocurrency, while IPOs are the representation of a more traditional way to trade.

The next rule after purchasing a hardware wallet would be investing in your very first Ether. That’s the moment when the wallet you bought will become actually useful. Filling your wallet with Ether makes cryptocurrency exchanges possible. After you’ve filled your personal wallet with ETH, make sure you know how sending it to the ICO works. Go to the Initial Coin Offering’s official website and look for the contributing section. Once you’re there, select your wallet and send the ETH/tokens amount you desire. To sum up, you need to purchase a wallet, ETH and invest it in a promising ICO.

icoStrategies

Selecting the appropriate strategy when you plan to participate in an ICO is a must. Investing in cryptocurrency is risky in the first place, so if you don’t wisely choose your next step, you might regret it later. The strategy that’s the most used in ICOs works as follows: get coins for as cheap as possible, get in ICO presales, wait for the ICO to spike and sell at the right moment for up to 500% profit. Another good strategy would be waiting for the maximum exchange rate of a coin and buy it right when it reaches its initial dip. The downside of this last strategy is that you’ll have to keep an eye on the actual market cap at all times. You can also choose to watch different coins go up and down the graphs and choose the perfect moment to invest and sell. Yet this requires some skill and a lot of patience, but it is the safest bet. The first two strategies can be too risky, while the third is steadier.

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