So what is an initial coin offering and can you really profit with them? Today I want to go over some different strategies I am personally using to profit and build my crypto portfolio.
Whether you are just getting going with crypto or maybe you’ve been around for a bit. This applies to you either way. I took some time putting this together. So hopefully it makes things a bit more clear. Also comment below if you have any questions.
What is an Initial Coin Offering
Simply put it’s a cryptocurrency BEFORE it hits the exchanges. Many companies are now coming out with their very own initial coin offering (ICO) to raise money and grow their company.
I will say that there are many good ICOs coming out these days. But I do think it’s important to remember. Most ICOs (I’d guess 95% of them) won’t be here 1-5 years from now.
That being said if you’re not looking for a store of value then the ICOs in general have a lot of upsides. There are certainly people working on great things in the crypto community. Some of them have a lot of potential to succeed in a big way.
Kind of like we saw with Ethereum. But be aware company founded blockchains is a great way for them to make money. And yes they should have utility which make them useful for everyone.
Just keep in mind that you should have a fair view of what they are trying to do. Most coins ARE NOT a good store of value like Bitcoin or Ethereum.
Most coins are very volatile and you can absolutely take L’s (Lose Money) if you’re in gambling mode and not doing your homework. Cryptocurrency in general is volatile so be aware.
I do believe some of these newer coins will become the next ETH or LTC. There are some incredibly smart people out with some big things happening.
Basically what I’m trying to say it’s always ‘safer’ to have your money in Bitcoin rather than ICOs.
How To Choose a Good ICO
Unfortunately there is no perfect strategy. Personally that’s what I love about cryptocurrency and ICOs. Just stick with it and keep applying yourself. It gets easier.
In general with ICOs you have to follow the hype to some extent. A really good cryptocurrency project with some hype is the best way to go.
Personally I never invest in ideas. Anyone can have an idea doesn’t mean they can make it happen. I invest in the team behind the project and more often then not infrastructure and currency projects. They typically maintain their value.
Sometimes it’s better to not invest and just hold. Right now the market is a bit bearish. You could have the next Ethereum just be prepared to hold.
In a bull market most any ICO can make you quick profits. Just be prepared because those profits can be short lived.
This is where the strategy comes into play.
ICO Strategy #1 – Quick In and Out
Like I said there is no exact science to ICOs and it never works out perfectly. I don’t promote this strategy but I want you to be aware. Most important so you understand how it works.
The more you understand the better off you are and the easier it becomes to succeed.
If you look at the diagram above you’ll notice a red dotted line. Anything to the left of that line you can usually take a profit in a bull market when there is a lot of growth happening. I’ve seen MANY not so great coins make quick profits then drop under ICO value.
It becomes much riskier in a bear market. You could easily invest in an ICO and it never moves. Or worse everyone dumps and it goes UNDER ICO value and you take a loss.
Many people knowingly ride the hype train and get into ICOs that have a lot of buzz. Even if the projects junk there just looking to get in and get out.
Lets say you get into some ICO for .01 and it goes to .10 just off the hype. You just 10X your initial investment. You can now flip that profit back into Bitcoin or Ethereum or a coin with a good store of value.
ICO Strategy #1 – Negatives
Just be aware you have to be on your game. It’s sort of like trading. You have to be ready.
It’s not always set in stone when a coin is going to hit the exchanges. You can even miss a run on a coin.
Lets say your away from your computer. Unknowingly your coin finally hits the exchanges but you’re on a two day vacation. Only to find out two days later you could of 10X your initial investment and now it’s UNDER ICO price.
This can happen easily with a coin just running on hype. It can also happen with a good project because of FUD or some other outside influence you have no control over.
Now you have two choices. You can either sell for a loss or wait and hope it goes up again. This is why I choose good projects. I am in it for the long term.
ICO Strategy #2 – Long Term
Unfortunately you can never be 100% with every single investment. Sometimes you have to feel the market and make moves as things progress.
I’ve invested in coins that look good then the company ran into problems. In a couple incidences I took quick profits during the hype phase because some news hit I didn’t like or things changed.
Overall I try and find coins that have a good team and good project. I’m always looking for long term projects I believe can fix a problem in the real world and has a team that can actually make it happen.
However no coin has an equal. They all have positives and negatives. I’ve yet to see the perfect coin. We don’t live in a perfect world.
But if you can find 2 or 3 quality ICOs you can literally set yourself up for life. Or at least for the year! Really all depends how much you’re investing and what your living expenses are.
ICO Strategy #2 – Real World Example
Lets go back to 2017. Lets say you did 3 ICOs and 2 of them just so happened to be WABI and ICON.
As you can see in the diagram above WABI was a massive success. I have taken profits in just about every phase of that coin. And I still hold a lot of WABI.
I was just getting started with ICOs last year. So I just followed those who knew a bit more then me at that time. I saw some of my friends earn millions of dollars with just WABI and ICON. Most of us are still holding lots of coins!
WABI we got in at .03 cents. That coin went over $5 USD and it’s still hovering around $1.50 USD. So we are still 50X over our initial investment.
Even if WABI growth is over it doesn’t matter. WABI is one of those coins that put you on the crypto map sort of speak.
What You Can Learn From This
Here are some WABI scenarios I saw happen:
- Some took initial investment during hype then held for moon
- Took profits on dump then held
- Some did a combo of 1 and 2 taking multiple profits then holding
- Held till moon (I don’t suggest; always take out your initial investment when coin 3X if possible)
- Take profits then reinvest on the dips (great strategy if you can read charts)
- Dumped 100% before moon (you lose long term profits if project takes off)
Funny thing is in a bull market WABI could easily hit $5 again. You could easily have another big run. If the market goes to 1 trillion (which many analysts are projecting) get ready for more alt coin runs.
Most important thing I want you to understand. There is no exact science with ICOs or crypto. Things can change quickly.
Also I want to point out WABI is just an example. It’s possible that run is over. I’m personally looking for the next ICO that will moon. You can absolutely make money with a coin like WABI but the big gains are for the most part over.
*** If you believe in a project I would suggest taking out your initial investment when the coins does a 3X. Holding on to the rest long term. You can also take profits along the way as market changes etc. If I truly believe in a project I will always HODL through the dips ***
More about this strategy here: How To Make Money with ICOs
ICO – Final Thoughts
Hype is one of the most important things when it comes to investing in ICOs. Like I said before. If no one knows about the project you’re not going to make any money. Nobody is going to buy the token. So in the short term this is very important if you plan on making fast money (Strategy #1).
In the long run a good coin will always prevail. Technology always wins in the long run hype or no hype.
What is an ICO – Conclusion
First thing I want to say I am not a financial advisor. This is not financial advice. Investing in ICOs is risky. Whenever investing make sure you do your own due diligence. I am just showing you what has worked for me in the past.
I do believe anyone that is willing to put in the work can win with ICOs and cryptocurrency. If you are willing to do the work I believe you should have access to this information for free.
I am living and breathing cryptocurrency every day. That is why I am sharing this through my blog. I want you to understand that this is legit. This is as real as it gets. I can understand if you’re a bit hesitant. It took me a few months to really ‘get it’ but now I am all in.
Having a better understand of ICOs will greatly increase your chances of success. Never invest in a project blindly.
My #1 Recommendation
ICOs are a great way to grow your crypto portfolio.
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