If you are an active ICO investor, then the chances are that you have bought into the next big thing and then watched it tank on release into the market place. Sometimes this swirling decline to the plug hole of the cryptoverse can’t be helped with outside influences such as market sentiment or general market cycles having drastic impacts. But (as I have learned) there can sometimes be certain warning signs lurking in the shadows, that whisper to you that this actually could be one of the garbage ICOs destined for the crapper. So what are these tell-tale signs, read on…
1. An inexperienced team
If the team is comprised of individuals that lack experience or gravity in the crypto sector, then this can be a warning. The presence of venture capture capitalist known in the field should be a big green light – without these individuals, then this could be cause for concern.
2. No use case for the token
If the token can be replaced by Ether or BTC, then it’s not really needed. For example, in my early investing days I sank some investment in a HR tokenised platform. It had its own native token on the platform to buy services and also then added BTC and ETH. Effectively, there was no need for anyone to use their token. In the end, it was vapourware – all investors lost hard.
3. Poor community on Bitcointalk or Telegram
Community can make or break a coin. When times are tough, does the team display the integrity and grit to get the job done. How enthusiastic and committed are the community members? If the team convinces others that they are in it for the long haul, then this is a massive plus. This, in the end, is your judgement call.
4. No signs of a major exchange
This one is a tough one. Platforms during the ICO are not allowed to talk about exchanges for legal reasons so you have to consider many threads to take a view on whether it is likely to make it onto a big exchange (consider community size, backers, whitepaper, team aims). Getting on the Binances and Bittrexs really does benefit the early investor.
5. Public sale is too long
It’s better to raise 100% of $15 USD than 50% of $50 million USD. I’m not a fan of these mega long ICOs that tie up your investment. Quality ICOs over an acceptable time frame work best.
And that’s my 5 signs the ICO you are about to buy is garbage. From my experience, winning in crypto is all about taking risks, but making sure these risks are calculated. Without doubt, we will all lose in some ICOs, but by being smart and applying knowledge we can position ourselves to be in the right place at the right time and hit that golden moon-shot. Take care dudes and good fortune to you!