How to invest in ICOs

Please be aware of the
Dangers of ICOs
- this is a finanancial mine field that is even harder to predict than HYIPs. You have been warned!

When investing into an ICO, you are buying a bunch or tokens or coins - usually without any immediate way to convert these back into Bitcoin or any other currency. So why do that at all then?

There are basically two ways how to profit from an ICO:
1) Selling the tokens / coins for a higher price later on
2) Using the platform as intended and spending the tokens / coins there - for whatever service they offer

To go into more details: The first way of gaining profit relies on having some place where tokens / coins can be exchanged. This is usually just not possible in the early stages of an ICO. Most companies do not want you to dump the coins early on for marginal profit, so they keep their internal exchange closed until well after the ICO.
When the internal exchange opens and you intend to sell your coins, better be quick! The first few hours after enabling an internal exchange are usually very volatile. If there are too much sellers, the price is likely to (permanently) crash. On the other hand if most people believe in the project and hold their coins, the price can skyrocket.

The decision on when/how to sell tokens from an ICO is much closer to actual daytrading then to HYIP investing - and it requires a totally different skillset

If a project survives the launch of the internal exchange and not all coins are dumped instantly, external exchanged usually follow a few weeks later. In most cases this gives a huge boost, because there are tens of thousands of investors on these big exchanges and only a few coins available in the beginning.

Listing on an external exchange has caused 10x to 100x price increases in the past. This is the ICO holy grail and what everyone wants. But be warned: only a very small percentage of projects make it this far!

As for the second way of profit: Let's say you've invested in an ICO that plans decentralized file storage and you've got a bunch of their tokens. Instead of selling them, you can also just use them as intended on the platform - which would give you basically free storage forever, since you've bought them at such a low price in the ICO. This is of course a rather rare case and not that interesting to financial investors. But it is a possibility and no one knows what the future brings to the crypto space ...

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