Investing in Crypto coins and ICOs
An investment implies giving money to acquire a cash flow.
Crypto coins have no cash flow. You're betting on their value increasing over time.
This is called speculation.
I made this video a few years ago discussing the two words: https://youtu.be/QEACN_QVEvE
If you'd like to discuss a business investment, please arrange a call.
First of all, ICO are not investments, are speculations, are bets; the only different between a cryptocurrency and a casino, is that in a cryptocurrency you have an idea of the past performance. Which is not - in anyway - indicative of future performance. Having said that, the world attention is all on Bicoin, which many agree with me, is a bubble. Bitcoin is also the first launched and the one who is a magnet for press attention. But there are other currencies, which under the radar screen are receiving a lot less attention, and yet are growing fast (e.g. Litecoin)
Now what you need to understand is that the price of a cryptocurrency is of course determined by demand and supply. However demand and supply in crypto currencies are completly dislodged from any economic activity. If you want to buy crude oil, anywhere around the world, you need Dollars. You buy dollars and buy oil. If you want to save you look for currencies related to strong economies with good interest rates. Then you buy investments denominated in those currencies. None of that is happening with crypto-currencies, and while we know there is a high demand and supply, very little is known of what is driving either (besides the buzz)
A couple of Entrepreneurs in Halifax, Nova Scotia, Canada have built a company around answering this exact question. https://www.tokenclub.co/
For ICOs, here is what I check:
1. Is there a prototype? I almost never put my money into ICOs with no products. No matter how many things their whitepaper and roadmap promises.
2. The team.
3. Whitepaper. Is it a platform (like etheruem) or an application? Platform is riskier but it yields better return.
4. Valuation. I will pass if the valuation is too high, even when the project is great.
In a way ICOs are more similar to angel investment than buying IPO stocks.