How to Buy ICO Tokens: A Beginner’s Guide 2022
Table of Content
How to Buy an ICO token?
If you are an individual who only spends a few minutes a day browsing through news articles online, you might have heard of ICOs. ICO’s are the new craze of the internet and people seem to go crazy over its release as they promise easy and reliable profits.
As this gets published, ICO Listing Online, one of the most respected portals when it comes to ICOs, has listed 5,600 projects within its platform, with a collection of 27 billion dollars. Scandal figures show how great the phenomenon of ICOs has been in the world market.
For you to understand better: What is an ICO?
While looking for options, investors have several options available. There are several ICOs that raise funds for important projects and we see that many startups also try to gain the attention of investors. They could be deploying several unconventional methods such as using a Shiba Inu as a pet and naming the token they have as Dogecoin. For a few of them who look to make a political statement go for Putincoin or Trumpcoin. If you’re wondering what’s next, there’s also a Useless Ethereum Token which is a real name and this exists solely to criticize the concept of ICO’s. They have raised quite a bit of money too!
Several successful ICO’s are capable of bringing in massive proceeds for those who invest early, you can see this in the image below.
It is important to note that these provide much greater and better dividends to the firms and people who organize them. ICOListingOnline has indicated that about 27 billion dollars were raised among all the ICOs that have emerged within the market between the years of 2017, 2018, and 2019. Companies were successfully able to raise money despite facing the toughest of times in the cryptocurrency market.
How to Buy Tokens During an ICO?
1. Register for an ICO token through the project website
Each ICO project procures funds through a functional website that is solely dedicated to ICO. The website specifies what the investment project is about, and it outlines their objectives and how long the financial campaign can last. This website is essentially where you can register for the ICO.
Before you step in, be cautious with ICO campaigns that do not require any registration. There is a slight possibility that it is a completely legitimate trade, yet the most reliable and high-profile ICOs now require investors to register and go through a KYC process which means knowing your customer.
2. Get Bitcoins or Ether
Bitcoin and Ether are two popular cryptocurrencies you need to have to participate in an ICO.
Being the most dominant cryptocurrency, Bitcoin is accepted practically anywhere in the crypto world. Ethereum delivers a stable and convenient Blockchain platform for developers to set up their projects, and it became a platform of choice for ICOs.
The minimum amount you can invest depends on the respective ICO and is usually displayed in the project’s White Paper, which can be found on its website.
3. Move your Bitcoins or Ether to a wallet that you are able to control.
We are reiterating the fact that you need to avoid keeping your cryptocurrency in a wallet that is provided by an exchange. You may end up jeopardizing the safety of your funds, as you are not in control of that wallet. You could move your coins to a software wallet that stores your passwords on the device of your choice. By investing in a hardware wallet, you can add an additional layer of security. Detailed information relating to Bitcoin and Ethereum wallets can be found in our specialized guides.
When it comes to the wallet you should have for the ICO tokens, there are many options, but one feature you should keep in mind when picking one is that it is compatible and consistent with the ERC20 token standard.
The ERC20 is the most across-the-board token standard to date. Also, it is the official benchmark for the Ethereum network. Therefore, virtually any wallet that supports Ether will be ERC20 compliant too.
4. Buy ICO Tokens
If you are registered with your ICO and have your funds available, all you need to do is send the related cryptocurrencies for the amount of your investment to a particular address of the campaign.
It can help you: How to choose an ICO in which to invest?
5. Participate in an ICO by sending your cryptos to their address
Each ICO Campaign has one motive – to get your money. They specifically try to make the process as insignificant as possible, so at times they tend to make their website difficult to understand with comprehensive information to get you to invest most of your time.
But, you need to be extremely cautious when sending your funds.
Firstly, check the website address as many times as you deem necessary. It’s also helpful to ask around from trusted sources. There may be fake ICO websites listed as advertisements at the top of Google search results. Those will look identical to actual websites, with only two address symbols or details being scarcely different.
Secondly, ensure you check the project’s wallet address as many times as feasible. There will be scammers, fraudsters, and phishers posting fake addresses online, so you need to be very careful not to end up sending your money to the wrong place. Unfortunately, if that happens, you will never be able to get the funds back. The most recommended thing is that we verify the page’s security certificates and cross-verify it with members of the ICO team about the integrity of the portal.
Some of the most popular and appealing ICOs will have several people sending Ether simultaneously, which can cause the network to crash or go down, meaning that your transaction could take a little while to complete. You can check these here.
Finally, be sure to include some additional Ether in your transaction. This other Ether will go on “gas, “allowing transactions within the Ethereum network. The gas serves as a transaction cost in this particular case. The amount of gas required is usually illustrated on the project website.
6. Get ICO Tokens to your Address
You should receive your newly purchased tokens at your wallet address when the transaction goes through.. Don’t worry if this does not happen straight away and be patient as it could take some time to be completed. Your tokens can arrive immediately depending on a certain campaign, but it can sometimes take weeks, months, or even longer than that. Many things can be deferred during an ICO transaction, and some deadlines can move further ahead on the calendar, etc. So, make sure to stay up-to-date and consider reaching out and connecting to other investors on reliable platforms and forums.
Sometimes when you receive the tokens, you may not immediately exchange them at an exchange. This depends on the rules governing a particular ICO. This information and the time you will have to wait before receiving the tokens are usually presented on the investment project’s website or White Paper documentation.
7. Once you have your ICO tokens, find out how to store them?
Again, always ensure your funds are stored safely and securely.
Most major ICOs will take the necessary steps to get your token supported by major wallet services, especially Ethereum’s official wallet service, MyEtherWallet. Even if it doesn’t support a particular token yet, the service allows you to add a custom ERC20 token to the transaction.
If you intend to use a hardware wallet, any ERC20 token can be transferred to the device and managed through MyEtherWallet. Also, hardware wallet manufacturers regularly keep updating their lists of supported cryptocurrencies. If the token you invested in receives that backing, all you need to do is download and install the latest version of the manufacturers’ official firmware.
How to Buy Tokens after an ICO
Once the ICO token period gets completed, and if it were successful enough, the token would eventually be listed on a cryptocurrency list, which particular exchange depends on the project. To know which exchange will list the token, you can follow the notifications of the project itself or consult the Altcoin section of the Bitcoin Forum and you will find a topic about the particular token. Alternatively, CoinMarketCap lists most of the existing cryptocurrencies as well as the exchanges where they can be traded.
When a token is listed on an exchange, it will trade against Bitcoin and Ether most of the time. You can also refer to our detailed guides to know how to trade in Ether and Bitcoin which has several sections on exchange transactions.
I bought my first tokens, now what?
There is no straight way to answer that question as It is regarded as an investment, so once you have acquired your tokens, you will have a choice to either use your tokens in the products or services that are presented in the ICO or retain them and wait for them to appreciate in value.
1. Use the Tokens
Tokens provide investors with prospective access to the product or service that they are offering. For instance, if the platform offers a betting service that is carried out in Blockchain technology, you could use those tokens to bet. It could also happen that the tokens are used to buy a unique digital product that the developers of the project will offer.
Finally, suppose the ICO was in the hands of a DAO. In that case, a Decentralized Autonomous Organization, which can be established on the Ethereum platform, the holder of the token is given the right to vote on the proposals shaping the organization and determining its direction.
2. Trade the tokens
Once the token appears on one of the exchanges, you are all set to trade it. You may find only Bitcoin and Ether to be the trading options available for quite some time after listing. Other trading options may be included later, as long as the token is in demand and appreciates in value. But keep in mind that some tokens will never be listed in the present or near future.
There are many thriving and profitable ICOs. Once the company conveniently passes the ICO stage, the value should grow as it becomes more trustworthy and better established in the cryptocurrency market. At the same time, the token’s value will also increase, allowing investors to earn higher returns. Nonetheless, this does not always happen.
Once you purchase your bit, you will need to be patient with your investment for a while. Your investment may shift into a total loss, or you may not see a profit for a long time. The token may have a value of almost zero, and then, a rapid and tremendous spike could happen, which may mean that the value of the token will keep increasing in value constantly, or it could be a one-time event, after which the value will return to zero.
The sudden rise in prices can take place in a matter of minutes and you will need to be quick to catch them.. Several exchanges have alerts to set a “stop-loss”, so make the most of these.
When trading in cryptocurrency, there are several ifs and buts. You can generate more money if you play your cards right in the market. The best instance we could give here is that of Ethereum. It debuted in 2014 with an ICO price of around $ 0.30. Its highest price in the market was $ 1,377.72 for each token. Take out the accounts so you can study how much the investors made from the ICO.
Learn more about the best returns on investment in ICOs: The 10 best ICOs with the highest return on investment
Who Can Participate in an ICO?
To invest in an ICO proceeding, you do not need a lot. Basically, the starter pack comprises internet access and some Bitcoins or Ether. Blockchain technology permits investments to flow from virtually anywhere in the world, at minuscule fees, and usually in just a few minutes.
But, ensure that it is legal in your jurisdiction. ICOs are one of the aspects of cryptocurrencies that legal authorities around the world strive to regulate the most. ICOs are explicitly prohibited in China, South Korea, and the United States, while others have presented certain regulations or are about to do so. In Thailand, for instance, ICOs must go through a government review and there they will determine whether or not the project can go on the market and be available to collect funds from investors.