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Warning: 81 Percent of ICOs are Scams

A good way to get ahead of making profits in the cryptomarket is through investing in an Initial Coin Offering (ICO). Like the Initial Public Offering (IPO) of publicly traded companies, tech companies nowadays raise capital through ICOs. Before being enlisted on an exchange, companies give investors a chance to purchase their coins or tokens on a set initial amount. Regardless of demand, the price does not increase or decrease during the ICO. After a certain period, the ICO expires, and the investors will only have to wait some time for the coin or token to be tradable in the cryptomarket.

Ideally, ICOs are the best way to get in on the entry level prices of tokens and coins. Legitimate ICOs are great opportunities for profit making.

Sadly, however, according to a study by Satis Group, an ICO Advisory firm, 81% of ICOs were fundamentally scams. Also according to them, around 6% of ICOs were failures, 5% had already gone dead, and only around 8% went on to trade on exchanges.

Pic from Medium

Based on their definition of the word “scam,” the 81% of ICOs that were categorized as scam did not have any intention of fulfilling project development through the pooled fund. Despite having complete websites, whitepapers, and promotional campaigns, these ICOs never used the raised capital for legitimate purposes. The failed ICOs are the ones who were not able to get their project off the ground, despite the funding from pre-selling. The 5% that had already gone dead are the ones that are inexistent now.

Looking at these numbers, it is important to do a really thorough background research before getting into ICO investments. Examine the whitepapers. Do due diligence. Do not just feel good about the projects. Know their legitimacy. For sure, the project owners are always enthusiastic and their promotions are great. Nevertheless, investors should still check on the project’s viability, feasibility, and potentials for real-world applications.

There are still many legitimate ICOs going around. You just have to know which ones are worth your investment. If you are fortunate enough to place your bets on a good ICO, you can expect high returns on your investment. Invest and trade wisely!

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Mil is based out of Philippines and has been writing for cryptonewsbytes.com since 2017. He enjoys doing market analysis on crypto and follows the trends very closely. He is a marketing genius and gets tremendous amount of energy to the team. He enjoys reading books in his spare time and big time into basketball.

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