To date, thousands of teams have announced the launch of their ICO, and now it is very difficult to figure out which of these projects will be successful in the market. Here are five top tips for those who want to learn how to distinguish winners from losers.
Find Information about Development Team and Advisor
Find out who develops the project and advises this team. Subscribe to their Telegram channels. Search their names using Google. Do they have any experience in the field of cryptocurrency? Did they participate in other projects that are still afloat? Did they upload photos of all team members on their website? Ask yourself if you have easily found information about these people? If it was not easy, and they do not share their experience in this area, most likely, they have never dealt with cryptocurrencies or hide something.
Study all data about the token
How tokens will be distributed? What percentage of them will be exposed to a CrowdSale, and how much will developers and consultants get? Will the team prohibit the resale of tokens for a period of time? These are very important things to consider. Many really good projects prohibit the resale of their tokens in order to prove to investors the seriousness of their intentions and convince them that this is a long-term project and not a pursuit of quick profits. Also, pay attention to the number of tokens in circulation and to the volume of total emissions and ask yourself if this project will not have a market capitalization that is too big for you.
Examine Project Financing Situation
How much money does the team want to collect? If they intend to raise $ 30 million, without explaining why they need so much money, a loud alarm should sound in your head. Visit their website and look at what they are going to spend this money on.
In addition, if there was a pre-sale of tokens, you should ask how much money the project received from institutional investors. If these funds amounted a large share, it may be better to refrain from participating in this project. There are cases when the ICO teams canceled a CrowdSale because they collected all the necessary funds already at the pre-sale stage. And now, 20% of their tokens are in the hands of a small group of individuals. Small investors like you have nothing to do in such a project.
Find Information about Community and Investors
The most successful projects are those behind which there are strong communities. Before investing in them, subscribe to their channels in Telegram. Pay attention to how administrators answer questions of investors. Determine how investors respond to the project. Go to the Bitcointalk.org site forum and read what people write about this project, whether they praise it or call it a scammer. You should also pay attention to whether they have investors from other cryptocurrency projects. If they exist, (for example, NEO) this is a positive factor. It is unlikely that large platforms will want to risk their money and reputation.
Pay Attention to What Stage this Project is at
How far did the project team go in developing their product? Do they have only a technical description or test network? In the second case, you can take a chance, but only if the team has a good reputation. In addition, it all depends on your goals and objectives. Are you going to sell these tokens a few weeks after the ICO or are you planning to keep them for a long time? If you are interested in quick profits, then you should not invest in a project that is at an early stage.
There is a huge number of ICOs out there, and each of them is promising enormous returns and useful perks for potential investors. Here is a compiled list of questions you should gather information on when performing your market research. These questions apply in both situations — deciding on an ICO to participate in or on an already established coin in the market.