We have been talking a lot about ICOs recently. We all know that when we participate in these ICOs, we get tokens or coins as a sign that we have contributed to the project. Now, what do we do with these tokens? How do we get our investment back with these tokens? Are there other ways on how I can maximize my profit with these ICO coins?
These are very good questions to ask indeed. Questions which we will be answering today. I will be talking about how we turn these coins into profit, where to turn them into profit and also ways of maximizing your profits. So stick around and read on, as we will discover how to turn these tokens into cold hard cash.
First things first, an introduction regarding tokens and coins, or more commonly known as altcoins. These are usually issued by projects who have opened up an ICO. These tokens may vary by platform, which in turn varies the wallets that you need to use to store them. For bitcoin variants, there are different wallets in there that you can use to store them such as Electrum, Trezor and Armory.
For Ethereum based tokens, these usually are ERC20 ones and the best wallet to use to store this is MyEtherWallet or MEW for short. Other variants have their own wallets, depending on the platform. So why do we need to know these? Well, this is the first step in turning these altcoins into cash. We would need to take our altcoins from the company or project’s ICO page and move them to our own secure wallets. This is to protect our own investment. Think of this like putting your stock bonds inside a vault.
Now the next step is waiting for when that particular altcoin gets listed in an exchange. Think of the exchange as a market where you can buy and sell commodities. These exchanges work like the stock exchange, and your altcoins work as stocks. This is where the trading begins. Once your altcoin gets listed, then you are able to move your coins from your storage to this exchange for trading and selling.
This is like getting your stock bonds from your vault, and then sending it to the market to sell them off. Exchanges will have their own fees, limitations and own market of their selected altcoins, although they offer the more common alts all throughout. Coins such as Bitcoin and alts like Ethereum, Litecoin, Doge, Monero, Bitcoin Cash and Waves are common among all exchanges while other smaller altcoins vary from exchange to exchange.
Now, choosing an exchange also needs a decision. The most common and largest markets are Bittrex, Poloniex, Yobit, and Kraken. Consider these like the big stock market exchanges such as NYSE, AMEX and other markets in Wall Street. Then there are smaller ones like Cryptopia, Liqui and Binance, who is a newcomer in the market but is rising steadily. Then there is the third type of exchange, which also works as a money changer. These are Coinbase, Xapo, ShapeShift and Changelly.
With the multitude of choices for exchanges, one should keep in mind what kind of coin you have and which of these companies trades these coins. For example, BNB, you can only trade your BNB coins at Binance, so the exchange you need to choose is Binance. Furthermore, if the alts you want to sell are available on big exchanges, I would suggest you either go to Poloniex, Bittrex and Binance as these are the more reputable ones and provide excellent support.
Now, on to the fun part. The main thing to do to get maximum profit is not dump your coins right away. Wait for a couple of months before dumping your alts since usually, when they hit the exchange markets, the price will be fairly low. At most, it will be on ICO price, and on some cases, even less. Wait for updates from the team.
Usually within a span of 6 months to a year, the price of the coin increases by a lot, especially if they have a very good team working on the project. The basic economic rule of “buy low sell high” is in full effect if you are trading alts. The most common trick is to buy or trade your ICO alts to newer ones with a good backing and wait for it to increase in price. Just like converting your bitcoin to an altcoin and await for the payoff.
Another fun way to invest and gain max profits is to buy a cheap ICO coin. This is the pump and dump method. This technique is mostly seen by people with deep pockets and are able to invest towards a project using a lot of money. This usually works better if you have money to splurge on a single project. This is usually good if you can buy in on an ICO with a low price like $0.01 to $0.05 per coin and be able to buy in bulk.
Another thing you should also look at if you will be doing this method is the bonus that you will get for purchasing early. For example, buying in with a bonus of 40% will net you more coins than someone buying in at 20% with the same price. The timing needed to do this must be carefully studied as loss of timing will make or break the margin of your profits.
Let me give you an example. There is an ICO that offers 50% bonus on your purchases. The price per coin is $0.01. If you are spending $1000 with the 50% bonus, you would get 150,000 tokens with your purchase, with the 50,000 coming from your bonus. Now compare that to someone who bought with the same amount, but with 20%. They would only get 120,000 tokens compared to your 150,000.
Your margin for profit expands by a lot. Now, if this hits the exchanges, and it hits at the price of just the ICO price. When you sell your 150,000 coins, you would be able to get a profit of $500 just from the bonus, and you will get your investment back of $1,000. That is if it enters at $0.01. Imagine how much you would make if it enters the market at at least $0.10 or even a dollar? This would increase your profits exponentially.
Now, these are just a few of the tips and tricks to be able to squeeze out as much profit as you can with every ICO investment you do. But do not forget that research, timing and also the amount of funds you can afford to invest are also important. Keep this thought in mind as well, only invest what you can afford to lose.
If you have doubts about the project, question the developers until you get a satisfactory answer. It’s your money on the line, you should get the information you need that suits you. Do not be afraid to walk away from an investment if you think it’s not good enough.