The rise of Bitcoin, Ethereum and other cryptocurrencies have made them a juicy medium for investing. Bitcoin has grown in price by over 4000% since last year while Ethereum has seen a hundred fold increase. These are great returns for cryptocurrency enthusiasts and traders.
Initial Coin Offerings(ICOs) are one of the many methods for making profit with cryptocurrencies. An ICO is basically a method of fundraising where companies or an organisation sells a token in exchange for some value of cryptocurrency(could be Ethereum or Bitcoin). They are very similar to stock market Initial Public Offerings.
ALSO READ: WHAT IS AN ICO?
Before investing in an ICO, you should carry out thorough information about the token. Useful information includes biographies of the founders, location of the organisation, trustworthiness of the parties selling the tokens and criminal history of anyone involved in the ICO. Many investors have seen their money go bust by investing in shady ICOs.
Here’s How You Can Make Money From an ICO
1. Buy Low, Sell High
Just like making money from Bitcoin or Ethereum, the best way to make money from ICOs is to sell the token when the price is high. Tokens could sometimes start sales at cheap prices for a couple of cents and they rarely cross the dollar mark. Buying tokens during an ICO ensures you have some of the currency before it hits the trading market. If the currency does well on the trading market(due to people buying more of it), the price will keep increasing and you can start to sell at those high prices.
ALSO READ: HOW TO MAKE PROFIT FROM BITCOIN
2. Get Bonuses or Bounties
Some ICOs offer a bonus or bounty for participating in the ICO. The bounty can come from a referral system or when you hit a specific threshold. Say for every 25 tokens you buy, you get 5 tokens extra. ICOs typically want you to buy more tokens(so they can raise more money) and they reward you for how much you buy or for referrals.
Like with cryptocurrency generally and other investment forms, it pays to thoroughly study any investment vehicle before you make purchases.