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Risks of investing in an ICO

Bitcoin and blockchain technology are parts of the most popular ways to spend money today. Before you bet with your money, you must analyze the many risks of involved. An investment in an ICO or an initial reserve of foreign exchange. Many people are fascinated by the growing sector of digital currency, which includes blockchain technology because of the possibility of raising funds very quickly. In the long run, however, the result can be bleak and many people end up losing money. Most ICOs fail for many reasons. When investing in an ICO, users should exercise caution and make sure they understand the risks they are taking. These are some of the most common risks when investing in an ICO.

  • Regulator

A big risk with ICOs is that ICO is currently unregulated. However, this may not be the case in the future. Everyone is investing in ICO to make money fast. However, they do not realize that ICOs will soon be regulated with increasing popularity. If ICOs are regulated, what happens to ICO tokens? Many ICOs can be sold or lost value. ICO regulation is a big unknown and a big risk for those trying to raise money.

  • Business

Investing in an ICO is risky, whether you choose an ICO on Ethereum or an ICO on Bitcoin blockchain. Although you can enter into your business, there is no formal license to consolidate your investments. If you are making your own business, ICOs and ICO taxpayers can make a great way to raise funds. In the long run, however, it could come back and bite you. The price of ICOs can drop quickly and you can lose everything your business is based on if you are not careful.

  • Taxes

An investment in an ICO can lead to many risks and tax problems. ICO tokens can be considered as different taxes. Some are classified as equity, others are property, others are debt and others are prepaid goods / services. Each ICO must be treated differently according to the tax classification. The risk associated with this digital currency ensures that ICO token is properly informed and preserved. Engaging in tax problems with the government is not a joke in the real world. Many people may think that with Blockchain technology, they can get away with small tax cuts, but there is no risk of using them.

  • Cyber Attacks

Venture capitalists investing in ICO is a huge risk because it's a cyber risk. In addition to many other risks, cybercriminals are constantly looking for new ways to hack the system and steal cryptocurrency via the Web. In fact, cyberattacks are more likely to occur when phisher attempts steal individuals' identities.

  • Fraud

In addition to cyberattacks, investing in an ICO creates a risk of fraud. Identity theft is common in the original currency proposed by ICO. The Internet and the digital space being so vast, fraud can occur and the risk becomes much more real.

  • Symbolic Risks

If you invest in an ICO, you can get ICO tokens. These cards are based on smart contracts like Ethereum. The risk of buying these ICO brands is that they can be stolen and lost, and that your wallet can be stolen online or offline in real money. There is no guarantee that you will be able to buy ICO tokens. Playing with Ethereum The ICO and the ICO tokens is a risk you want to take. Make sure you know how to buy an ICO correctly if you decide to buy the tokens.

  • Illegal

We do not know whether investing in ICO is legal or not, which makes it very risky. Currently, the initial currencies offered by ICO are not classified. However, many people think that cryptocurrency can be classified by the US Securities and Exchange Commission. If cryptocurrencies are values, they are actually illegal. However, this is still the subject of much discussion. The point here is that digital currencies such as Bitcoin and Ethereum ICO may be illegal. Therefore, getting into this finance game may not be the best decision.

  • Structure

An investment in ICO can be risky because the structure of ICO is not always stable. Since ICO can be reserved for consultants, investors and hedge funds, ICO can be marketed in different markets. Some investors may sell ICO tokens at higher and / or lower rates, depending on why they are purchased. They can also offer greater benefits than other investors. Then the whole structure can be rejected. Flea owners do not have the right to decide why ICO tokens should be sold. The volatile structure of the digital currency market can make it a risky investment.

  • Investor / Contributor

Investors and taxpayers are at high risk when investing in ICO, as many investors and taxpayers do not have enough knowledge to buy ICO tokens and to effectively use digital currency. Since blockchain technology is still relatively new, all players in the game are still learning the best strategies for investing and valuing their cryptocurrency. Unless you know better and better regulates this system, the risks remain high.

  • Team

The development teams that invest in ICO are like investors who once invested in venture capital in the Internet game. While investors who use their money to bet on the Internet may end up risking their money, the benefits for participants may not be the same at the end. Only time will tell, but the risk of an ICO team is high. Of course, the only way to raise large funds is to take significant risks. The great risk brings a great reward or a great loss.

You see, there are many risks when investing in an ICO. However, it is also possible to raise funds very quickly with the ICOs. This makes the cryptocurrency so attractive. If you like to live on the sidelines and do not lose sight of the opportunity to win, the ICOs may be in your way of entry. Just be sure to do your due diligence and do your research first, because you must know how to choose an ICO in which you want to invest.

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