Investing in ICOs
An ICO (Initial Coin Offering) is like an Initial Public Offering (IPO) where investors in a crypto project receive a token instead of stock in a company. Typically, ICOs are used to raise funds for a crypto project by selling their native token to early supporters at a very low price—usually denominated in popular coins like BTC or ETH.
This opportunity to get in early could pay off in the long run. For example, Ethereum’s 2014 ICO raised several million dollars over the launch period. But it’s important to be on the lookout for scams, as some ICOs have gotten away with millions of dollars. For example, Modern Tech’s ICO got away with $660 million in ICO earnings while investors got practically nothing.
Reading the whitepaper is one way to root out potential scams. Dive into the document’s details and try spotting anything that doesn’t add up. Doing your research on the founders can go a long way to protect your investments.
Hunting for microcap altcoins
Beginner investors tend to get started with well-known tokens, but the hunt for microcap altcoins can be lucrative if you find a winner.
Typically, microcap altcoins have a small market capitalization in the range of $50 million or less. If you’re able to invest in a popular microcap coin early, it’s possible to see a major upswing in your investment. A few examples include Modefi and Argello.
However, there are risks tied to investing in smaller coins. Some compare microcap coins to the penny stocks of the crypto world. Though it’s possible to make a profit, it’s not always easy to distinguish winners from losers, which can make it feel like a gamble. If you’re planning to buy and hold for the long term, that could backfire if the coin turns out to be a bust.
Trading popular narratives
As you build your portfolio in any asset class, paying attention to popular trading narratives can pay off, and there are plenty of opinions out there. One popular trading narrative is that Ethereum is deflationary after the merge, but this is still debated by the community.
You can choose to base your trades on these narratives. However, it’s important to do your own research before diving headfirst into a popular narrative. Being a skeptical investor is one of the keys to success in crypto.
As you hunt down the facts, reputable sources like the project’s official website are the best sources of information. Although learning from others on social platforms is helpful in building commanderies, you should always double-check the facts for yourself.
Copy-trade whales
Whales are traders with extensive portfolios that control most of the market for a privado crypto. As the saying goes, if you can’t beat them, join them. In the crypto space, you might be able to avoid the pitfalls of learning how the market works by simply copying the trades of successful investors.
Whether or not copy trading is effective depends on who you’re copying. In some cases, the crypto whale is making a trade that won’t suit your portfolio well. But in other cases, you might get lucky when the trades of a major player in the crypto space strikes it big.
Not sure how to copy trade? One way is to dive into the blockchain. By looking into the data, you can determine the transaction sizes. If you spot a transaction with a high value, a whale just made a major trade.
The good news is you don’t have to handle this analysis on your own. Whale tracker tools like Whale Alert or ClankApp can be super useful in tracking the biggest crypto investors. If you want to put your copy trading strategy on auto-pilot, check out eToro. Their platform makes copy-trading successful investors easy and convenient.