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Is it Better to Invest in ICO or in the Existing Cryptocurrencies?
Many novice crypto market investors face the problem of choosing the most profitable investment option: ICO tokens or the existing cryptocurrencies. Let’s review the key risks and advantages of both options.
ICO tokens are coins issued in order to raise funds for further cryptocurrency promotion on the market. This procedure is called ICO (initial coin offering). Obviously, anyone may easily join ICO and profit may be huge — as much as dozens of thousands percent of the initial price. But it can only happen if the project is successfully developed and entered the market. Meanwhile, it’s really complicated now when the market is crowded with all kinds of ICO’s.
At the same time, many projects, even those that turn out to be unsuccessful in the end, usually generate profit at the first stage, even if it’s small.
There’re two key points to pay attention to when investing in ICO tokens.
– Make sure the team is honest and the project is promising: the web-site must indicate the team’s contacts, a complete description of the project and the customer support service. Additionally, it must contain a mandatory warning about the risks related to ICO investments.
– ICO investments are passive — ICO tokens cannot be traded which makes them still more risky. In practice, if the project fails, there’s no way to get your investment back.
Currently, over 2,000 various cryptocurrencies that have confirmed their viability are being traded. You can make a passive investment or trade on the exchange. However, not all cryptocurrencies are profitable investment-wise — most coins cost little and are traded in low volumes. At the same time, some new cryptocurrencies are quite promising and could abruptly surge in price and generate a high profit for their holders.
All cryptocurrencies are characterized by volatility, i. e. exchange rate fluctuations. Volatility makes it difficult to forecast the price, thus increasing the risk of losses even if the investment amount is not big.
– Overall, the TOP cryptocurrencies cost more and more with each passing year; therefore, long-term investments in these currencies generally produce an excellent profit.
– Lesser known coins are less predictable and could either surge or remain at the same level for a long time or experience an abrupt fall. However, if a coin does surge, it’ll generate a lot more profit than TOP cryptocurrencies. Off-top coins could grow in price a dozen, hundred or even thousand times.
It should also be noted that even if coin price doesn’t grow, unlike ICO tokens, the existing cryptocurrencies may be sold to retrieve your investment or minimize losses.
– Investing in ICO tokens means a high risk, a huge profit in case of success and inability to make up for losses in case of failure.
– Investing in off-TOP cryptocurrencies involves a high risk, a big income and capability to partially make up for losses in case of failure.
– Investing in TOP cryptocurrencies means the highest level of stability on the crypto market, a lower income than off-TOP coins and ICO tokens and the biggest recovery of losses in case of failure.