In 2017, cryptocurrencies have seen an over-exaggerated increase in popularity which is evident on social media. Celebrities, innovators, politicians and most of the community have begun to publicly advertise and criticize cryptocurrencies on social media. As an active trader and crypto enthusiast it is my duty to caution newcomers about scams, thus I wish to provide some research tips on Initial Coin Offerings (ICOs).
Tip # 1: Research ICO website
Google the ICO in which you are interested on investing. Look for a project roadmap to see how developed the project is. Research the people behind the project through their LinkedIn and social media. Do they have a bad reputation? How much and what experience do they have? Do not jump into an ICO simply because a famous celebrity is backing it or investing a large sum.
Tip #2: Look at the Supply
Is there a cap on the supply, or can additional tokens be created? If we do not take the market cap into consideration and more tokens are to be created, the value of the coins you invest on will dilute. Market cap is the money invested into a token. To find the value of the token you divide your market cap by the circulating supply.
Tip #3: Is demand for this token present?
You must research how this ICO will be unique and better than other technologies if they are existent. Which functions does this ICO platform have which makes things more convenient? How can the token appreciate in value?
Bonus Tip: Patience is key
There is no fast road towards riches. Maybe there is such a road, who knows? Remember that cryptocurrencies are extremely volatile and sometimes unpredictable. Cryptocurrencies can be exciting but can also turn into the worse nightmare if proper research is not done and what you thought was the ICO of the year turns into the fraud of the year. Use reputable sites to access ICO websites and be cautious of cloned websites.
Disclaimer: I am not a financial adviser and I am not to be held responsible by any person using this article for which it results in any gains or losses.