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Author : Ben Krypto 9 Jan 2018
This has resulted in astronomical market caps for cryptocurrencies that, frankly, should not be worth billions or hundreds of millions of dollars. Why? Because many of these cryptos have no fundamental value. Or at least not anything matching the speculative value assigned to them. The coins promise ideas or solutions that are years away from being practical, either due to technological or societal limitations. Or the token has no real purpose (Raiden, I’m looking at you) and is just a cash grab. Or the problem has no need of a decentralized (read Blockchain) solution and works just fine (or better) being centralized. The list can go on and on. But what you want to take away here is that coins that don’t have strong fundamentals (and a real use outside of just being a money grab) will collapse when the crypto mania ends and people start evaluating cryptos based on real-world applications. So if you invest in a coin, make sure there is a damn good reason for that cryptocurrency in the first place. 6. CHECK THE HYPE METER. The more hype that an ICO accrues, the bigger the ROI may be, right out of the gate. The most hyped ICO’s can, in the right market, do many multiples (2x, 3x,5x,10x, etc). So take a good look at the ICO and see what sort of hype it has accrued so far. Some metrics to look for to help you gauge how much hype the ICO has. Looks at the size of the Telegram channel & Slack channel. Check out the metrics for how many recent members are joining the Telegram.
Articles about the ICO on reputation websites (+1 if those articles are found on well-known news websites FORBS, HuffingtonPost, Wired, major news outlets, industry-related websites). The social buzz surrounding the ICO (tweets about the ICO from various influencers in the space, big Reddit discussions, the ICO being mentioned/shilled by Crypto Youtubers and various signal groups online, etc). 7. UNMET DEMAND MEANS MOON. Another tangible metric you want to look for is to gauge the level of unmet demand an ICO will have. In this case, unmet demand means there are people who want to buy the ICO but are unable to for some reason. This usually comes down to the ico having whitelists (special email lists you sign up with before the ICO begins that allow you to participate in the ICO). Here are some metrics I look at to help gauge if an ICO has a lot of unmet demand. These are holistic metrics, but they often give you a good indication if an ICO will explode when hitting the market. The key point to keep in mind is the harder it is for people to participate in the ICO, assuming there is a lot of demand for it and hype around the ICO, the price is likely to rise quickly post-ICO because those unable to participate will buy as soon as the ICO hits exchanges. Here’s what I look at. Positive Whitelist Metrics. Whitelists required to participate in ICO. Difficult to obtain whitelist. A limited number of whitelist (few hundred or a few thousand) that fill quickly.
Whitelists closed due to too many people. Small-cap per whitelist (a few eth at most). Strict KYC. Many Big countries unable to participate in ICO due to KYC regulations (China, USA, UK, Singapore, etc.). Positive Presale Metrics. Presale sold out quickly. No Bonuses or Small Bonuses are given in Presale. Looking at how the presale did is Limited or small bonuses in presale is important, especially if the market is bearish. If large bonuses were given out in the presale or private sale, it’s likely those investors will dump for profit at ICO price or below ICO price as soon as the coin hits the exchanges post-ICO. Some of the best ICO’s with the biggest ROI result when there is no public ICO due to the ICO selling out during the presale completely. This results in a lot of unmet demand (basically, everyone not in the presale). Some ICO examples of this. OmiseGo. Zilliqa. POA Network. ICON. So the rule of thumb here: find an ICO that has a lot of unmet buyer demand. If an ICO allows everyone who wants to participate to participate, there may not be a lot of demand to buy the coin when it hits the exchange. 8. DOES THE ICO HAVE A PROTOTYPE OR WORKING PRODUCT. Many ICO reviewers weigh in a ‘prototype’ as one of the major factors for evaluating an ICO potential. The reasoning is that if the project has a prototype, they are close to delivering something tangible. I feel this is important, though also not always necessary. There are many many big-cap cryptocurrencies that have no working product or no prototype, yet are valued at billions.
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