If you have any type of a connection to the cryptocurrency industry, you have become extremely aware of ICO’s. They are the most popular topic right now because everyone just wants to buy coins in hopes of major returns. It is gambling at its finest.
ICO is a relatively new concept of raising funds for launching new crypto-currencies and block-projects. The acronym ICO stands for Initial Coin Offering. It’s is a model of crowdfunding. A company produces a certain amount of crypto tokens , and then sells them to its target audience, often in exchange for Bitcoin or fiat (“normal” money) . Finance has always had the acronym IPO which stands for “Initial Public Offering”. In short, this is the share price that a stock goes for when it originally goes public on the stock market. The ICO price is similar to this. Basically, the ICO price is a discounted price for a future currency. Companies use this as a fundraising tool in order to create their technology company. ICO is a start-up pre-selling its own currency (tokens). Their value is directly linked to the number of future users (and their level of activity), and can rise exponentially in response to limitations on issue, and growing demand.
Honestly, ICO’s could be a gold mine right now. I would normally not suggest buying into things like this but they seem to get good returns. I will warn you that this is going to change. People are starting to understand that they are putting money into a random company and eventually people will understand that most of these companies are cash-flow companies. I would personally suggest buying in at the ICO and then getting out as quickly as possible. Take your 40% gain and run because you really do not want to lose it all if you play the long game with some of these companies.