Although most cryptos have experienced a pullback over the past few weeks, one corner of the crypto market continues to shine: ICOs.
ICOs, short for Initial Coin Offerings, continue to be one of the most profitable ways to invest in crypto-currencies.
For instance, while Bitcoin is down by about 50% since the beginning of the year...
The average profitable ICO is up more than 256%.
The problem is, investing in ICOs has a unique set of challenges:
Not only are they difficult to find and get access to...
But as The Wall Street Journal recently reported, nearly one in five ICOs is a scam!
Today, I’ll show you how the ICO market works…
And how to separate the good from the bad.
271 “Red Flags”
To explain what’s going on here, first let me explain what ICOs are.
ICOs are a way for crypto companies to raise start-up capital for their business.
Basically, investors like you provide these companies with capital, and in exchange, the companies give you crypto “tokens.”
And here’s the best part: soon after you receive these tokens, you can sell them — and as I mentioned a minute ago, this can lead to tremendous profits.
In some ways, this is similar to how an IPO (Initial Public Offering) works. But here’s the thing...
With an IPO, the companies you invest in generally have a long operating history: they’ve been around for years, have thousands of employees, and millions of dollars in sales.
But because crypto companies are so young, it’s difficult to find data on them, and even more difficult to tell a good investment from a bad one — and for investors like you, that’s scary.
In fact, last week, The Wall Street Journal released the findings of a study it did on ICOs.
It compiled data on 1,450 ICOs, and what it found is very alarming:
According to The Journal, ICO filings contained “plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.”
Out of 1,450 ICOs, 271 of them appeared to be potential scams.
That’s roughly one in five ICOs!
Why This Problem Exists
The reason for all these scams isn’t hard to decipher:
As ICOs have gained in popularity, they’ve started attracting scam artists.
To show you how quickly ICOs have skyrocketed to prominence, check out this chart from CB Insights:
The blue bars represent conventional (venture capital) funding for blockchain related companies, and the red bars represent ICO funding.
As you can see, by the second and third quarter of 2017, the use of ICOs soared. In fact, ICOs became the primary method of funding.
And this trend is still accelerating. In the first three months of 2018, ICOs raised $6.3 billion.
But with so much “easy” ICO money available, a dark underbelly has emerged. For example:
A crypto start-up called Confido raised $375,000 and then disappeared without a trace…
And Tezos, which raised $232 million, is now embroiled in lawsuits, and investors are demanding their money back.
So, how can you figure out which ICOs could make you rich…
And which ones could leave you flat broke?
The “Secret” To Successful ICO Investing
Well, there’s a “secret” to making money in ICOs…
And it’s the same secret you can use to make money in nearly any type of investing:
Do your research, and approach any potential opportunity with a healthy dose of skepticism.
The thing is, ICOs present some unique challenges.
For example, as we mentioned earlier, very little data is available to help you evaluate these crypto companies.
But this is precisely why we started Crowdability:
We help non-professional investors like you successfully navigate the start-up and crypto-currency markets. Simply put, we aim to help everyday investors get their share of the explosive profits in these new markets.
And this also explains why we were excited to learn about a new start-up…
Introducing: TruStory
It’s called TruStory.
TruStory is aiming to identify ICO scams before they happen.
Its proprietary technology will evaluate the veracity of claims made by companies conducting ICOs.
If it identifies too many false claims, it will flag an ICO as a potential scam.
The company was started by a former Goldman Sachs analyst who’s worked as a venture capitalist, and as an engineer for CoinBase, the world’s leading crypto exchange…
So we believe this company has a great deal of potential.
Coming Soon
Unfortunately, TruStory is still in development.
Until it’s ready, here’s what we recommend you do to evaluate ICOs:
Review the company’s management team. Dig into their past experience and track records. And look at the company’s other investors and advisors for signs of credibility.
In short, use the criteria we teach you about in our free 10 Crowd Commandments report »
By the way, if you’d like to learn more about TruStory, you can view a presentation from the company’s founder here »
And if you’re interested in learning more about ICOs, please click here and let us know how we can help »
Happy investing.
Best Regards,
Founder
Crowdability.com
