The fuss around ICO is well-justified: who would not want to make immense profits without doing anything? Nowadays, it does not seem so easy though. There are hundreds of cryptocurrencies, some are popular and some are not. Everyone might be thinking, “I would have been a millionaire, have I invested in bitcoins in 2011.” Well, failing to bet on one successful cryptocurrency does not mean you have to miss on all the others.
Making money from ICO is a risky yet a high-return venture. Many investors receive good bonuses from promoters of new cryptocurrencies. It does not require much money to make the initial investment – just as much to be able to give away without expecting anything in return. Getting involved in ICOs is better at the pre-ICO stage. This way, you will be one of the first to invest and, probably, receive additional tokens or other incentives. Not bad, right?
Risk diversification is what any financial advisor would recommend you to hold on to when investing in ICOs. It means that you do not invest in ICO and wait for years to check whether it worked out or not. You invest in many ICOs at once, or in ICOs and other financial securities. Why is it better this way?
- You diversify the risk across your portfolio. It means if one investment brings no return and another one brings more than the expected return, it averages itself out.
- Your profits and losses do not rely on risky ICOs only. Having other securities in your portfolio gives you profit while you wait for your ICO to pay back.
- You are more financially secured and better off overall.
Hold, Sell, Hold
Many investors use the “hold, sell, hold” technique when trading cryptocurrencies. The point is to sell 30% of the tokens immediately and wait on with the rest 70%. When the price goes up, sell the rest. This method may not be suitable for everyone since it requires the ability to interpret and understand market charts, knowledge of technical analysis, and free time to keep a track of things.
All in all, it is still not too late to start making money with ICOs. Do not forget to make the necessary due diligence and estimate the worst-case-scenario outcomes. The most important thing is to understand what is the purpose of the tokens you invest in and whether you think they will be in demand in the future. If the answer is yes, do not hesitate to pour some money into it. If you are risk averse though, it is better to invest in more reliable securities.