The ICO (Initial Coin Offering) has all but replaced the IPO (Initial Public Offering) in the last six months. Venture capitalists around the world are concerned but the general public for the first time is given an opportunity to gain entry-level access to new projects. At the bottom of this article, the King has listed his favorite February ICOs.
What is an Initial Coin Offering (ICO)?
An ICO is defined as the releasing of a new cryptocurrency or token in exchange for other crypto or fiat. The purpose of this mass token release is to generate funds for a project or business venture where the token has a purpose. ICO tokens are quickly becoming the IPO of the future allowing both the public and large investors early access instead of the “gentlemen’s club” affect occurring with IPOs in the stock market. It is almost impossible to buy a stock before it arrives on an exchange, but an ICO gives the same level of access to the entire population from the idea’s inception.
The cost of an ICO is far less than having an IPO but the tradeoff is in the ICO market there are far fewer regulations. Very rarely do you hear about a stock being a fraud from inception versus doing fraudulent business activities. In the ICO world, it is regular news that hackers stole X amounts of dollars from a specific ICO, or that the entire ICO website upon completion never sent tokens and the founders disappeared. An ICO should not be looked at as a comparable to the IPO until there are far more regulations. However, the ICO should be considered a high risk, high reward investment that can yield returns far higher than an IPO in the short term if proper due diligence is performed.
The Ethereum ICO (“ETH”) was initially priced at 0.0005 Bitcoin (BTC) and one year later was trading at 0.012 BTC that is a profit of over 25,000 percent not including the increase of the value of BTC. If you take into account BTC has increased in value during the prior year your return is just truly astronomical. The Ethereum ICO cannot be expected of all ICOs, as far as returns go, but a successful ICO from presale to public launch (when it is added to an exchange) can easily yield 100-500 percent returns depending on the hype and demand for the specific coin.
When a coin hits it’s hard cap it is a very positive sign, and the earlier you are able to purchase in the ICO process generally determines what bonus percentage you will get. The difference between a 50 percent and 20 percent bonus because the individual was lazy and waited a week is a poor way to give up a 30 percent return. The best time to enter an ICO is during the presale. However, this is also the hardest time to enter an ICO as it usually requires the largest amount of financial contribution.
How to Pick an ICO
Multiple steps go into analyzing an ICO. Do not cut corners with your due diligence as this will be where you end up losing money for not reading.
- Research the Team (Google the names),
- Read and Analyze the Whitepaper,
- Understand who the Developers are (Google again),
- Consider if This is a Short or Long Term Play,
- Analyze the Road Map (do you want to be in a project that is two years from launch?),
- Is the Company Releasing the ICO Already Established (making money pre-coin launch?),
- RESEARCH (look at the website, make sure the links are functioning, all the simple things people forget),
- Join Their Social Media (Telegram, Reddit, etc.).
Researching the team may truly be the most important aspect of looking up an ICO. This doesn’t take much more than a Google search. Is the team active in their country of origin, better yet, are they active across different continents? Has the team actively taken roles in the blockchain and the technology industry in the past? Are all the team members indeed focused and working on this project? Has the team presented at conferences and made a name for themselves within the community?
The CEO or main Founder doesn’t always have to be a blockchain guru; sometimes it is best to have a more business-oriented individual who is a public figure. ICOs are most successful when they hit their hard cap, having a public figure as the face of the coin can ultimately be better than having the best developer in the world, that no one has ever heard of. It is important team members who are not developers are either big names in business, very important in their country, or have celebrity status. ICOs are a unique world, the Wild Wild West of crypto, and publicity from a top team member is a very important aspect.
Way too often the King hears, “But I didn’t read the whitepaper.” How are you going to put hundreds if not thousands of dollars into a new coin and not read their specific purpose outlined in the whitepaper?! This will explain how many coins the founders have, how long they must hold the coins after the ICO launch, what platform the ICO will be launched on, the purpose/utility of the coin. Any questions you have should be answered here, or the whitepaper is incomplete.
However, a few spelling errors in English are not a cause for alarm. The King realizes this seems ironic to say but most of the best ICOs have teams made up of foreigners whose first language is not English. The team may not have one native English speaker on it resulting in a few grammatical errors. This should not be cause for concern (although should be fixed!).
The developers easily may be more important than the founders and CEO. The backbone of the entire project is always the development team. Make sure the developers that the ICO claims to be working for their project are indeed participating. The King rarely recommends (if ever) to invest in an ICO that has hidden team members. Transparency is very important when it comes to allocation of ICO proceeds and especially the dev team behind the project. A quick Google search will yield what other blockchain projects the dev team has worked on, if they’ve completed any interviews, etc. If you are satisfied with the dev team that is a huge step in determining an ICO you want to invest in. Dev teams are always important but become less important in short-term plays.
It is essential to determine if you are investing in the ICO as a short or long-term hold. If the goal of the investor is not to hold the coin for a six-month period and watch the actual product develop you are considering your ICO solely to make money, in the short term. Although you should be in crypto for the long haul (HODL), many individuals remove a portion of their ICO profits once certain percentages are hit. The King does recommend this technique unless you want to be a long-term holder of the coin because once the ICO hits exchanges, a successful launch will yield over 100 percent returns in generally under one month. Pigs get fat; hogs get slaughtered. If you are making 100 percent per month, there should be no reason you have not removed a predetermined percentage to reallocate.
Analyzing the roadmap is probably one of the simplest steps in your ICO due diligence. Look at it, read it, see the timelines and goals they’ve set. Many ICOs will have working projects at launch, or already have a working app that the new currency will integrate successfully into. A clear roadmap with goals that are attainable is what you are looking for. Do not expect the entire project to take one quarter to finish, but be weary if they are expecting two or more years before there is any market adoption. This is a balancing act that is also determined by whether you plan on using the ICO for a short-term profit, or a long-term hold. A factor that influences many people regarding long term or short term is whether the coin is a part of an already functioning company.
Companies that are already profitable are great options to host ICOs. They generally release a utility token that serves a purpose to the company. The utility may be paying a bounty for a specific task; it could be to purchase electric from a functioning power plant, there are many options for great utility tokens from already formed and profitable companies. This should be looked at as more of a bonus than anything because the hardest ICOs to find are from already formed, profitable companies, entering the blockchain space.
Do basic research. Do your due diligence. The King cannot exemplify this point enough. Most scams can be found by typing the coin’s name into google as individuals may already be investigating scam and fraud claims. ICO ranking services should not be viewed as an end all, but they rarely have top-ranked ICO scams (the King has not seen one yet). The higher the ICO rank on these sites the less likely it is to be a scam. There is no guarantee it is a great product or coin, but this is a nice scam deterrence. Make sure to check all the ICO ranking services, checking just one may lead you to a biased opinion. Basic research seems like such an easy task but so many jump right into purchasing an ICO with expectations of a windfall without doing any research, make sure to always do your due diligence.
ICOs for February
With the state of the market being most volatile, currently having money in ICOs is a safe way to protect it while almost guaranteeing a nice return if the proper research was completed ahead of time. There are many scam ICOs but instead of highlighting bad ones, which the King may do for a future article, instead solely positive ones will be selected. The King does not believe in spreading FUD in the crypto space unless it is truly pointing out scam or fraud. In analyzing ICOs this month, it was clear the level of scam has decreased although it is obvious not every one of the hundreds listed will hit their hard cap or be successful in the short or long term.
Vestarin: (Presale Occurring)
This was an ICO the King came across more than a week ago and signed up to be notified upon their presale beginning. Their presale began January 31 and they are already more than halfway to their soft cap. The bonus being offered is currently at 56 percent and, according to their whitepaper, will drop dramatically once the soft cap is reached. Normally the King do not believe in large bonuses, but this bonus only applies to the first two percent of funds raised. A huge bonus is very common especially if it only applies to two percent of funds raised (as is the case here).
ICO Bench which is generally fairly hard on new ICOs gave this one a 4.7. Their ICO profile was rated a 4.9; their team was rated a 4.6, their vision a 4.8, and their product a 4.4. A quick scan of ICO Bench demonstrates very few ICOs are above a total rating of a 4.0, and even fewer break the 4.5 mark. If the ICO hits an exchange at the current presale price, you make 56 percent. It is unlikely the ICO hits an exchange at presale and is more likely it lands on an exchange at or above the final ICO price. That means the return is 56 percent?. However, that question mark could be 200 or 1000 percent depending on the initial pricing of the ICO on exchanges and when you purchased your coins. The King always recommends getting into ICOs when the bonuses are best as they will decrease to almost nothing by the conclusion of the ICO.
Vestarin is attempting to be an early entrant in providing businesses and users a way to spend crypto with each other. They already have a demo downloadable platform to check out. The positives about Vestarin are lengthy; it’s dev team, their great bonus (for the very short term), being able to get in on the presale, their positive reviews by leading ICO sites, and their presence on social media so early in their coin release. Concerns the King has are always surrounding huge bonuses. However, this concern is alleviated when it is analyzed that the 56 percent bonus is very short-lived, only being given to the first two percent (approximately) of money raised. To find out where to buy Vestarin check out the bottom of this article! Vestarin is the King’s favorite safe play for February as you will receive the biggest bonus until the soft cap is reached.
The King hates the dreaded Know Your Client (KYC form) form you have to submit with 90 percent of ICOs. Especially because so many forbid U.S. investors. When analyzing a new coin or token, it is important to see if there is an actual utility for it. KYC Legal (“KYC”) not only has a utility but solves a purpose currently plaguing the blockchain. If individuals invested in the crypto space and ICO platforms were pre-approved on KYC Legal, it would expedite the entire process from token distribution, approval of clients, to many other functionalities that are currently stalling.
KYC Legal, unfortunately, is not in presale any longer but is rushing toward their hard cap which is a very positive sign. KYC Legal is calling their platform, “A universal alternative to IDs.” The possibilities are endless as the information will be stored on the blockchain. Imagine a world where you don’t to carry an ID as it is stored in the blockchain, or where you can buy any ICO and receive tokens without the hassle of KYC over and over. KYC Legal plans to solve these very relevant blockchain issues that are only getting more significant as more ICOs are released.
The King likes KYC because of the incessant problem in the blockchain they are trying to solve. Vestarin is a great play as they are a favorite among the ICO ranking websites and have a solid dev team, and a bonus that will only decrease in the short term. However, HireMatch is one that should not be forgotten. Their ICO ends February 15, and their team are the founders of Recruiter.com. This is a team that is experienced and connected in the job recruitment world, and they are an early entrant on to the blockchain.
Their goal is to provide a monetized incentive for recruiting services to anyone able to recruit. This removes the intermediaries, namely recruitment agencies, which charge ten percent of your salary and pays the friend or acquaintance that referred you a much smaller amount in “HIRE” tokens. The platform, the team, and the concept are all fantastic for the blockchain. The fact that the team was very active in the internet space founding Recruiter.com is a significant bonus for the expectations of what is likely to occur with HireMatch in both the short and long term.
There are many ICO scams floating around the crypto space. Make sure to do your excessive due diligence when determining to invest in an ICO. All three ICOs recommended above are great options. If there is a demand to provide a “Scam” ICO article the King will be happy to oblige. Generally, the King likes to focus on the positives, and the three ICOs listed above should all do very positive things for the crypto space.
To read the King’s prior articles, to find out where to purchase the ICOs mentioned above, to find out which ICOs hit their hard cap recently, or to get in contact directly with the King, you can on Twitter (@JbtheCryptoKing) or Reddit (ICO updates and Daily Reports).