2018 has been a tougher year for ICOs with the downturn in the wider cryptocurrency market also hitting the market conditions for promising blockchain platform projects raising investment capital. As a potential ICO investor, that is probably a good thing. Media coverage of blockchain technology may have died down this year but is set to spring back to life in 2019 as several major platforms launch. Financial services is the sector where blockchain solutions are expected to first see major mainstream deployment but in real estate, government and other areas blockchain platforms that are currently in beta will move into wider use.
Many expect that will reignite media interest and investment in the technology. Which means investors with their eyes open for promising ICOs might be best to act fast before valuations are driven up again. With that in mind, here are five top tips for anyone evaluating their first ICO to invest in:
- How Much Added Value Does Blockchain Bring?
The first and most important piece of advice when evaluating an ICO to invest in is to carefully consider how much added value the fact the solution uses blockchain technology brings to the table. Is blockchain really necessary or an improvement compared to another kind of database technology? Only invest if the answer is a resounding ‘yes’.
- Research the Team
This goes for any start-up investment but is just as important when considering an investment in an ICO. Who’s behind it, what’s their background, do they have complimentary experience and skill sets? It’s not necessary for the team members to have already launched multi-million or billion businesses successfully but do their profiles and experience stack up?
- What Investment Has Already Been Raised?
An ICO might be the first big investment round the company is going through but it shouldn’t be the absolute first. To get to the stage where a team has something to show to justify an ICO they should have already raised at least some investment capital. Who has invested in them so far and have they stated their reasons for doing so?
- Read What Others Are Saying About the ICO
Check out forums and other online spaces where ICOs are commonly discussed. You won’t be the only one considering investing in the same ICO and others may have questions and points that haven’t occurred to you.
- Don’t Invest More Than You Can Afford to Lose
Another important tip that is valid regardless of whether it’s an ICO you are considering investing in or any other kind of investment from stocks and shares to a regular non-blockchain start-up. No matter how promising, new enterprises are always high risk so never invest more in an ICO than you can absorb without any real financial pain if it doesn’t work out.
The article was written with the information support of InvestorGreg.net .
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