If you are trading in the crypto world, you should be able to identify good and bad ICOs as there are many ICOs out there in the cryptosphere. Here are some of the signs which you should keep in mind while investing in new ICOs:
- Huge Hard Cap
A very high cap of an ICO means that no one will be waiting to buy the tokens on the exchange and huge effort will be needed to make a secondary exchange.
- Inexperienced Team
If the team of the ICOs is not experienced and not well known, then it is a sure sign that the ICO will be bad. You should know whether the team members are crypto advisers and whether any venture capitalist investing has been done.
- Very Aggressive marketing
When the ICO is doing very belligerent marketing and you see Google remarketing banners and Facebook banners everywhere, then it is definitely a red signal. If the ICO is promising nice profits then it should not be trusted.
- Low-quality discussions on the community forum
If the community does not create high-value discussions, then it is also a red light. You should ask questions on the Telegram, ICOs BitcoinTalk announcement thread, and gather as much information about the ICO as you can. If the quality of the response of the team is not proper or if they are avoiding your questions, then it is a bad sign.
- A Need of the token
It is very important to understand that there is genuine need of the token in the project and the whole ecosystem should revolve around the token. If the token can be easily replaced with the help of a Bitcoin or Ethereum and the project will still work, then there is no need of the ICO and it will turn into a bad investment eventually. So, study the project carefully before investing.
- Circulating Supply
You should be aware of the circulating supply of the token. You should be beware if a small percentage of the total tokens is only distributed in the ICO and there is no finite number of tokens. Also, if there is no lock up on the tokens reserved for the developing team, then it is suspicious.