One of the best ways to invest is when the price of entry is very low. Buy low and sell high is the saying.
When a company goes public, and people believe in the idea of the company, it will generally grow quickly which means you stand to make a tidy profit.
The same principle applies to when a new coin or token is released on the blockchain.
These days, there are a lot of new coins coming out due to the nature of the blockchain as the applications require using a token.
Rather than sell shares in the company, coins are offered for sale to fund the company and investors jump on board.
If you’d like to participate in these Initial Coin Offerings (ICO), then there are some steps you need to take.
Read on for the quick and basic guide to get you started.
Register With an Exchange
If you don’t already have any cryptocurrency, then you’ll need to set yourself up with an account on an exchange.
This way, you can convert your fiat money into crypto so you can then buy into the ICO. Usually, you will need either Bitcoin or Ether for this.
Make sure that you do this well ahead of the scheduled ICO since it may take a few days for the transaction to process.
Once you are accepted into the exchange and have an account with a digital wallet set up, then buying the cryptocurrency only takes a few minutes from when you buy to when you have access to it.
In some countries, these bitcoin exchanges are not allowed.
Though bitcoin may not be explicitly illegal, you have to be creative to open an account and transfer money.
If you live in a country where this is the case or you don’t have a bank account, you can still get bitcoin to your wallet and participate in the ICO.
Bangladesh is one such country but when you take a look at the BTC to Bangladeshi Taka exchange rate, you can see that people are still actively trading.
There are Peer to Peer platforms where you can send people cash in exchange for their Bitcoin which is one way to avoid the ban.
Understand What You are Buying
Before any ICO there is usually a white paper issued beforehand. This is similar to a prospectus when buying stocks.
It is a summary, but in great detail, about what the coin’s purpose is and the way it works.
This is essential to read ahead of time so you know what the actual use of the coin will be.
This is usually what determines how well a coin will trade later as the ones that serve a specific purpose and are useful in solving a problem will generally do well value wise in the future.
Then, you should read the terms and conditions of the purchase agreement to make sure that you are going forward in the correct way.
*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.