Trading Cryptocurrency ICOs: What Is The Upside?
Shain Vernier • 2 min read
Penny stocks or pink sheet issues are traditional favorites of adventure seeking investors. In much the same vein, the world of cryptocurrencies presents a constant supply of freshly minted ICOs to leverage-friendly bargain hunters.
If you are interested in taking a risk-on approach to the cryptocurrency markets, then playing the exploding ICO market may be for you.
ICOs Present Big Risk And Big Reward!
I discussed Initial Coin Offerings (ICOs) in an update from last week. Basically, they function as a way to raise money for cryptocurrency firms, similar to a stock’s Initial Public Offering (IPO). However, there currently is no regulatory body so proceed with caution!
Frequency And Variety
New ICO offerings are coming across the wire on a constant basis. Nearly every other day brings a fresh one and the opportunity to invest in a budding cryptocurrency firm. 2017 has been a banner year for ICOs, with 140 launches raising over $2 billion.
When it comes to trading options, ICOs offer considerable diversity. A wide variety of services are represented by ICO entities, based largely on blockchain technology. Commerce, artificial intelligence applications, commodity/cryptocurrency standardization, and entertainment are just a small sampling of the core businesses behind ICOs.
Having access to information is a crucial aspect of trading. That is where ICOs can be a challenge. With no real media outlets or regulatory bodies to vouch for a firm’s authenticity, fraud is a considerable factor in the market.
The use of a social trading platform can help in avoiding scam artists and false ICOs. Also, a study of each firm’s white papers may shed some light on the intent of the business.
Bottom Line: ICOs and cryptocurrencies are quickly becoming a large part of the contemporary financial system. In order to engage them from a position of strength, be sure to perform your due diligence.