INFOGRAPHIC: Are Initial Coin Offerings a worthy investment?
ICOs have been a major buzz especially after Bitcoin and Ethereum hit a record high value that made lots of investors millionaires within a short time period. More investors and even average income earners have begun to pump money into newly launched cryptos with the hope that they will reap better returns in the future.
What Is The Purpose Of Holding An ICO?
An ICO gives businesses a fair chance to get investors by offering them a new cryptocurrency (tokens) at a discounted price. Unlike traditional investments, the investors do not get to own a percentage (shares) of the company. They get their ROI by profiting from the value of the tokens after a certain amount of time when the company becomes successful.
Recently, there has been a significant rise in the number of ICOs. The optimism about the emergence of digital coins has shown the potential change that digital systems will have in the financial industry. It will be easier for banks and other financial institutions to handle transactions efficiently and securely. Now, everyone wants to try their hands on cryptocurrencies, but is it worth it?
Although it is a super opportunity for crypto entrepreneurs looking for funding, ICOs can be a nightmare for investors. Many people have been duped into investing in non-existent companies, leading to loss of hard earned money.
For this reason, major social media platforms have instituted an advertising ban on the marketing of ICOs. Recent studies performed by btxchange.io show that even some countries such as South Korea have banned ICOs as well. As a result, there has been a decrease in the number of avenues that companies can advertise.
The advertising restrictions have, however, benefited the investors by weeding out dubious companies such as Petroleum and giving an opportunity to the surviving companies to provide real value to the investors.
It’s An Investment Worth Of Your Time And Funds
Despite the losses, the long-term profitability of investing in ICOs promise high returns after a couple of months. To make more profits, the best practice is to buy more tokens at ICO and sell them after a certain amount of time when the company becomes successful.