Advantages and disadvantages of investing in ICO
Posted On 05/08/2018
Investing in Initial Coin Offering projects becomes very popular today. Such types of projects attract investment in cryptomoney. This is the currency generated by algorithms.
Investment in initial coin offering project is quite low risk. If a start-up develops well, a stakeholder will be able to get the voting right in a business. If it does not work well, the investment in crypto money will be returned.
Advantages of ICO projects
Initial Coin Offering projects are very attractive to invest in. They have many advantages. Here are the main ones:
- An investor has to invest cryptocurrency. A stakeholder doe not risk to lose dollars or euro. In fact, he puts his new cryptocurrency. This digital money is even not yet monetized. This means a person doesn’t risk a lot.
- It is possible to earn a fortune. ICO projects are not national. They are implemented on the global scale. That is why if the project works well, a stakeholder will get a big return on investment.
- A investor participates in the performance of business. ICO projects let people to take business decisions. Stakeholders are not passive. They can influence the way the business develops.
- ICO start-ups usually get initiated in the most innovative spheres. The majority of start-ups help resolve very important business issues. They are initiated in the spheres of Knowledge management, Data management etc. This is the reason why these types of startups develop quickly. They also generate huge earnings.
- A stakeholder can invest in as many start-ups as he wants. ICO start-ups are not regulated by any governmental regulations. The state can’t control the investing activity of a person. This is the reason why this is very attractive project to invest.
- It is possible to support a new cryptocurrency. If a projects develops well, cryptocurrency can be monetised. It can even become a hard currency within short period of time.
These are the main benefits of investing in ICO projects. An investor who wants to derive good income, has to be risky and be able to choose truly innovative project. If it is done correctly, the return on investment can be huge.
Disadvantages of investing in ICO
Many people are still skeptic when it comes to investing in ICO projects. There are many reasons for it. Here are the main disadvantages of putting money in these innovative projects:
- An investor has to understand well the specifics of modern markets. It is not evident for many people how virtual start-ups work. For this reasons many still perceive these start-ups as not reliable.
- It is possible to lose assets. There is no guarantee that an ICO will become successful. Virtual ICO often are less successful than other business start-ups. The risk of failure scares many investors away.
- It is a long-term investment. Stakeholders rarely have the return on investment immediately. They have to wait some time for the business to start working. The time is usually quite long.
These are the main disadvantages of putting money in ICO. In order to take a decision to invest or not, a good idea is to read carefully business proposal and learn how the given business sector will develop.