InvestingA Pro Guide for ICO Investing

Coinsauce has prepared a list of "red flags" necessary to decide which ICOs are worthless.
Dare ShonubiSeptember 28, 20186 min

You probably know that there’s an “ocean of ICOs” out there, we do too! Generally speaking, it is quite a feat to tell the good from the bad these days. Although many investors have been able to set their own principles and guidelines; some even having professional investment advisors to help do the heavy lifting of scrutinizing these ICOs, many investors out there are still left in the dark.

Coinsauce has prepared a list of “red flags” necessary to decide which ICOs are worthless.


Vague whitepapers

Always have doubts when somethings are too good to be true. Photo by: Bruce Mars


A lot of investors are only fascinated by the positivities of the cryptocurrency markets. They want to wake up and see their cryptos surging off the charts! They have no time to read the long, complicated, technical text that explains the actual business idea(s) which an ICO presents.

They don’t care about whether or not there is a prototype. Project developers are aware of this fact. Legitimate ICO projects take their time in explaining their business proposition in clear and simple terms. They do not want to confuse their investors, who probably have a list of other ICOs to consider if one proves incomprehensible.

On the other hand, scam projects, usually present a vaguely written whitepaper. They present too many technical terms, which are usually filled with fluff; and then try to impress potential investors with vain promises. These promises are usually vague and open-ended.


Unreasonable returns of investment

Photo by: Lorenzo Cafaro


Many successful ICOs usually record an organic upward trend in token price after their tokens get listed on exchanges. However, these prices are typically supported by public trust, and supported by the token issuers themselves at least in the beginning. Gains are usually not in the hundreds of percent.

If perhaps you are currently considering a project which promises up to 200% return on investment, you might want to take a step back and reconsider your options. Except for the cases of early cryptocurrencies like BTC which recorded an exponential price increment, many alt coins and start-ups have no such capabilities. Unreasonably high returns are a clear indication of a potential scam.


Unknown Team

Every ICO has a set of project developers which work together to achieve the same purpose. The more popular and professional (i.e. having other crypto projects under their belt) they are, the better the chances of the project surviving. It is a necessity that these people be presented on as many publications as possible. They must be made known through public interviews, press releases, and blogs.

Destinations like whitepapers and particularly, project website must boldly feature their names, faces, and most importantly, public profiles where potential investors can contact anyone at any time. A few of their previous achievements are also a necessity. This exudes confidence in you as an investor. Scam projects often do not have the required professionals and therefore, will, in most cases, not present any competent-looking team profile. Even when they do, they often don’t have public profiles for vetting purposes.

Cover photo by: Pexels

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