Jane Fowler

Is It Safe to Invest in an Initial Coin Offering (ICO)?


The internet has brought us many different types of investment opportunities. Some of them have been reasonably good, some have been disastrous, and, sadly, some of them have nothing short of scams.

In the world of crypto currency, however, the investment opportunity that everyone is talking about is the investment in new and developing crypto coins and tokens, called initial coin offerings, or ICOs. These are a form of fund raising for new crypto currency ventures that is very similar to a traditional initial public share offer (IPO) that a conventional business would use to raise capital.

Is an ICO legal?

ICOs are not currently regulated by the statutory financial regulators, because they are currently viewed as being a form of crowdfunding, rather than a traditional capital investment opportunity. It is very likely, however, that they will eventually become regulated, but in the meantime, there is nothing at illegal about an initial coin offering.

How risky is an ICO?

Just like shares, the value of crypto currency can fluctuate, as has been seen recently with Bitcoin. It is important that you research ICOs carefully before you make an investment, just as you would with any business investment opportunity. The best way to do your background checks on an ICO is to visit a site like https://topratedicos.io/ico-reviews/. There you will find full details of the latest top-rated ICOs, as well as reviews of the opportunities and the sites own rating of each ICO.

How do ICOs work?

The principles behind an ICO are very simple. It is a means for new crypto currency businesses to raise the initial capital they need to launch their new venture. The company will issue a white paper, which will provide details of the venture and explain how the crypto currency is going work. They will also invite people to make a purchase of the crypto currency, with either conventional currency or other crypto currencies. That first release of the crypto coins or tokens can be viewed as being the same as shares in the company, which will hopefully rise significantly in value once the currency has been fully launched.

The ICO offer will have a target amount of funds that need to be raised and a time limit on the offer. If the ICO is unsuccessful and the target is not reached, funds will be returned to the investors and the project abandoned.

What level of return can I expect from an ICO investment?

The attraction of an ICO is that, if the crypto currency is successful and takes off, the returns can be very high indeed. There is, however, an element of risk in ICO investments, just as there is with any investment. The value of crypto currencies can go down, as well as go up. As an example of a very successful ICO, however, the value of the Ether, a crypto coin released in 2014 by the start-up Ethereum, was bought by early investors at a value of $0.40, and by 2016 the Ether was valued $14.

The answer, then, to the question of is it safe to invest in initial coin offering is; if you research the offering at ICO review sites like https://topratedicos.io, you do your own due diligence, and you only invest what you can afford to lose, ICOs have the potential to bring you real capital growth.

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