PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

The Factors You Should Consider Before Investing in an ICO

Shidan Gouran by Shidan Gouran
November 13, 2017
in Industry Opinions
0
Crypto Bitcoin

Both Crypto Trading Volume and Bitcoin Price Take a Dive

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Initial coin offerings, or ICOs, are have been occurring at a rapid rate as cryptocurrencies continue to gain mainstream traction. Despite how significant the growth of cryptocurrencies has been and how substantial its market cap has become, many investors are nonetheless unfamiliar with certain aspects of cryptocurrency investing, including the manner in which these digital currencies are brought to the public market.

An ICO is the ground floor-level offering of a completely new cryptocurrency to the public. Similar to an IPO, this is an investor’s chance to get in at the earliest possible point, before the market forces of supply and demand can cause the asset to be sold at a price other than its initial price. In kind, the same positive and negative variables apply to investment in ICOs, requiring investors to do their diligence and mitigate the risk of loss as appropriate. However, today’s ICOs have a unique property: As a result of strong attention to cryptocurrencies from the viewpoints of both investment management and regulatory compliance, the marketplace is efficient and informed. Accordingly, the risk factors that surround such investments as unproven or untested technologies do not necessarily apply to large-scale ICOs, since there are many eyes on each coin offering, which can identify and call out any problems or shortcomings.

The ICO is a unique investment vehicle because it uses the “network effect” to build up a strong base of users. For existing major networks, whether they are social media-based, cause-based, profession-based, or based on other factors, there exists a previously built-in group of like-minded participants, which is the primary necessary ingredient for a successful cryptocurrency. ICOs are already being created for communities of all types, for the simple reason that they are a secure, sustainable mode of facilitating transactions that builds on a community’s existing strength, while adding brand new bonds within the community to explore new avenues using a cryptocurrency that is specific to something they already do or enjoy.

As it’s a relatively new type of asset, investors must still exercise caution when investing in cryptocurrencies, a warning that also applies to ICOs. They should apply critical thought to questions such as the market necessity of the coin (e.g. “Is this currency doing anything differently than this other currency?”), which economic model underpins it (that is, it may be a good idea in theory, but it might not attract actual demand), and how transparent the company is being about its overall progress. For example, is the company using independent auditors? Is it clearly communicating its development milestones to the public? These are similar expectations to those investors would have in the case of a stock IPO. It is therefore advisable for investors to hold themselves to the same standards when considering investing in an ICO.

There are many untapped corners of several markets, of which new cryptocurrencies and ICOs stand to leverage. Significant potential may exist in a given ICO that comes to the market. However, like any other form of investment, people must be willing to do their homework, and they must understand their personal ability to tolerate risk. Cryptocurrency investing has been an incredibly exciting arena over the past few years. With several new and innovative tokens coming to the market, ICOs are a great way to tap into potential before it materializes.

Tags: CryptocurrenciesGlobal Blockchain TechnologiesICO
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    legacy infrastructure

    How Modernizing IT Can Help Banks Compete With Fintechs

    February 7, 2023
    Buy Now Pay Later BNPL, B2B BNPL

    B2B BNPL Offers a High-Potential New Chapter in Payments

    February 6, 2023
    eCommerce On Social Media, social commerce

    The Rise of Social Commerce and Social Payments

    February 3, 2023
    Electroneum AnyTask; ETN Crypto, sales enablement

    Ethical Financial Selling: The Role of Compliance Technology and Sales Enablement

    February 2, 2023
    direct deposit

    Nacha Launches Campaign to Reach Millennials on the Benefits of Direct Deposit

    February 1, 2023
    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    January 31, 2023
    credit card tumbling

    How to Detect, and Prevent, Credit Card Tumbling

    January 30, 2023
    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    January 27, 2023

    • Advertise With Us
    • About Us
    • Terms of Use
    • Privacy Policy
    • Subscribe
    ADVERTISEMENT
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • News
    • Resources

    © 2022 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Equinix report - Dojo Delivers Fast, Reliable and Secure Card Payments to Businesses on Platform Equinix