Are you planning to invest in cryptocurrencies? One of the recommended methods is investing in Initial Coin Offering (ICO) coins. These are coins released into the market through ICOs. After purchasing ICO tokens, moving tokens to wallet is essential to ensure their security and full control, as wallets store the private keys needed to access your digital assets safely.

The ICO cryptos provide a good option for investors because they are offered at low prices to draw interest before they can start to be traded on the markets. Therefore, most of the tokens are in high demand when they hit the market and early investors can sell them at a profit.

Even as the ICOs present a golden investment opportunity, it is important to appreciate that not all of them are genuine. Joseph Lubin, Ethereum co-founder, and Brad Garlingehouse, the CEO of Ripple, lamented that most ICOs out there are scams.

This post is a comprehensive guide on investing in ICO cryptocurrency to help you know which ICO to invest in and how to optimize returns.

What Exactly are ICOs?

Initial Coin Offering (ICOs) is a method of raising funds used by projects and businesses to sell tokens in exchange for fiat currencies or digital coins. Because they are not regulated, businesses are able to raise cash fast without going through the rigorous procedures required by conventional lenders such as banks.

ICOs present investors with an opportunity to become part of major crypto projects and make some returns on investment when the value goes up. If you buy a cryptocurrency in a project that uses the proof of stake (PoS) protocol, it might be possible to get rewards for simply staking the coins.

How to Pick the Best ICO Tokens to Invest In

To invest in ICO tokens, the first step is selecting the right ICO. But this is not easy because ICOs are entering the market at a rapid rate. To pick the right ICOs to invest in, here are the steps to follow:

• Evaluate the ICO Team Composition

Evaluating the ICO team helps you gain important insights about the project’s seriousness. Follow the development and advisory team members to learn who they are and their past successes.

You can find details about them on social media like LinkedIn or the companies they work for. You could even reach out to them, especially on social media.

The goal is to understand their commitment, skills, and ability to help the project succeed. If team members have negative feedback from past crypto or non-crypto work, it is best to avoid those tokens. Additionally, once you acquire tokens, moving tokens to wallet promptly is crucial. This safeguards your investment and keeps control of your assets in your hands.

• Evaluate the Project’s White Paper

A token is only as good as the project it is attached to. Therefore, it is advisable to only invest in an ICO token based on a high potential project. To know more about the project behind the token of interest, you should read its white paper.

The white paper is an authoritative report that informs readers about a problem and how the project under consideration plans to address it. It provides details of the project, the tokens, and their distribution. It is the talking point that the ICO creator(s) uses to demonstrate why an investor should join the project by purchasing the tokens.

If there is anything that you do not understand about the project from the white paper, make sure to seek answers from the development team. Ensure to ask even about the minor details of the ICO and the project before making an investment decision.

• Find Out What Top Crypto Communities Have to Say

Crypto communities such as Reddit and Bitcointalk have become reliable sources of information for people who want to know anything about cryptos. The communities are able to look at projects from different angles and give conclusions that you can rely on when investing in cryptocurrencies. You can simply post a question about the ICO of interest and wait for replies or read past reports.

Note that even with the crypto communities, it is still possible to come across some positive threads spread through bounty programs that only target to showcase an ICO in a positive way. Therefore, you should only consider reports that are consistent with the findings from personal and professional assessments.

• Check the Long-Term Use of the Funds

As an investor, you can tell the potential of a project by looking at the long-term use of the funds raised during the ICO. It is advisable to only invest in ICOs that direct funds to project

development. Sustained development of a crypto project can help raise the value of the tokens and deliver a high return on investment.

How to Invest in ICO Tokens

After identifying the preferred ICO, you can go ahead and buy the tokens on sale. Here is a demonstration of how to invest in crypto tokens:

• Read Through the Token Purchase Procedure

Every ICO has its own design of running the token sale process. In many cases, they provide interested parties with a landing page where they can use selected payment methods to buy tokens. However, others prefer using crypto exchanges because they already have operational frameworks to support crypto trading.

Make sure to carefully follow the prescribed crypto sale procedure for a successful purchase. For example, you should check the maximum and minimum tokens that users are allowed to purchase. The limits are used to prevent a lot of tokens going to one party.

• Open a Supported Wallet

After establishing which ICO to invest in, you will be required to open a supported wallet. A crypto wallet is a digital location for storing cryptocurrencies. Note that although this is the accepted definition, the wallets do not in reality store the digital coins.

What the crypto wallets store are sets of codes that help users link with their blockchains, send their coins, receive coins, and check their trading history. The private keys is an identifying code that ensures only you have access to your coins in a blockchain. The key should always be kept private.

The other codes are the public keys that help act as the address to the wallet. Your wallet will also generate a seed phrase that is used to regenerate the private keys in case of a loss.

Make sure that the wallet you select supports the ICO token under consideration. Some great examples of crypto wallets out there include Ledger Nano S and MyEtherWallet. Remember that you should never share your private keys and/or the seed phrase of the wallet.

• Join the Exchange Being Used to Sell the Tokens

If the selected ICO token is being sold through a cryptocurrency exchange such as Binance or KuCoin, you will need to start by joining it. This involves creating a user account and funding it.

If the exchange running the ICO only allows users to purchase the new tokens with other coins such as Bitcoin, you need to convert your cash to the supported token using a platform such as Kraken or Localbitcoins.com. Then, move the coins to the exchange running the targeted ICO.

To make a purchase, navigate to the trading platform on the exchange and select the new ICO token. Then, pair it with the coins in your exchange account and click purchase. The new ICO tokens will be credited to your exchange account.

• Move the Tokens to Your Wallet

Most cryptocurrency exchanges are considered insecure because they are centralized and an easy target for hackers. If you follow cryptocurrency history, you’ll see that most major losses happened on exchanges. For example, the Mt. Gox hack in 2011 caused a loss of over 600,000 BTC. More recently, the Youbit attack forced the exchange to declare bankruptcy. That’s why moving tokens to your wallet right after purchase is essential to keep your assets safe. Wallets give you full control of your private keys and reduce the risk of exchange hacks.

To keep ICO tokens safe, always move them to your wallet immediately after purchase. This is safer because only you control the private keys. Tokens are even more secure if stored in a cold wallet like a hardware or paper wallet.

How to Profit From an ICO

Once you have identified a good ICO, there are several ways to benefit from it. Note that the selected strategy will depend on personal targets to either sell the coins immediately or hold them for a longer period.

• Sell the Tokens When the Price  Goes Up

The simplest strategy is buying the tokens on offer during the ICO and selling when the price goes up. Because only a limited supply of tokens is released into the market during the ICO, few people are able to get the opportunity. After purchasing, moving tokens to wallet is important to ensure they are securely stored until you decide to sell.

When the tokens are released into the market, the demand from those who did not get the opportunity pushes the price up. This is a great opportunity to sell and make some returns on your investment. Before selling, however, it is important to move tokens to your wallet to ensure their security and maintain full control over your assets.

• Trade the Tokens in the Markets

Instead of making money from an ICO by selling the tokens immediately when they hit the market, you could consider trading them on the markets. Crypto trading involves taking short or long-term positions based on market trends.

It is important to appreciate that the crypto market can be highly volatile. Therefore, traders should take time learning how to interpret the market trends and use important features such as a stop loss to keep associated risks low. Additionally, to protect your investment from external threats like exchange hacks, it is crucial to practice moving tokens to wallet immediately after purchase, ensuring full control over your assets.

The Final Take

If you are considering investing in ICO cryptocurrency, it is a great way to join the crypto niche and enjoy high returns. ICOs allow investors to buy digital coins when prices are low and sell later when prices rise, or vice versa. To keep your investment safe, move tokens to your wallet immediately after purchase. This protects them from risks linked to exchanges.

However, it is important to appreciate that investing in ICOs requires taking some risks. At this point you might be asking, “Should I invest in cryptocurrency?” While the answer to the question is “yes”, it is important to take caution by following these best practices of crypto investing:

• Only invest what you can afford to lose.
• Make sure to spread your investment in a number of assets.
• Do not borrow money to invest in ICO tokens.

Note that no matter the risks involved, cryptocurrencies are ideas whose time has come. Therefore, do not be left behind as others march ahead. Use the above guide to identify good ICO tokens, set aside some funds to buy them, and remember the importance of moving tokens to wallet promptly to keep your investment secure.