What are the benefits of investing in ICOs? One of the most important benefits of investing in ICOs is that all investors have an equal opportunity to buy tokens at their first offering. And if the project is successful, investors can reap enormous returns. Rather than having to wait for several years (like IPO investors often have to), ICO investors often see their investments appreciate much quicker. Moreover, if the token gets listed early on major exchanges, profits can be taken out with ease. What are the drawbacks of investing in ICOs? Even though ICOs provide compelling advantages for investors, there are also drawbacks that should be carefully considered. The most important drawback is the increased volatility of ICOs, which largely exceeds the volatility of traditional investments like stocks. Every investor should understand that great rewards come with great risk. There is no guarantee you’ll be rewarded for investing in an ICO - and actually, there’s no guarantee you won’t lose your entire investment, either. Another aspect worth mentioning is that ICO investors must be vigilant at all times to avoid becoming victims of cyber attacks or frauds. Phishing scams, where an attacker might impersonate a member of the ICO’s team in order to trick the investor to send him the funds, have occurred during several past ICOs. Are ICOs right for me? This is an important question and the answer is: it depends. In general, investing in cryptocurrencies is risky. And ICOs can be some of the riskiest investments of all. If a project makes sense from a business perspective and you can foresee a long-term demand for its cryptocurrency, it might be a good idea to invest. Since it is common for crypto companies to provide only a short white paper and a roadmap before starting their ICOs, we advise you to conduct thorough research before deciding to invest. The last but perhaps the most important thing to mention here is that, as with all investments, it is inadvisable to invest more money than you can afford to lose. Examples of some of the Best ICO returns It is true that not all ICOs turned out to be tremendous successes, but there are several tokens and coins launched through ICOs that outperformed all expectations, as well. NXT NXT’s ICO was launched in September 2013 on the BitcoinTalk Forum. During the ICO, one coin was valued at $0.0000168 and, even although the event raised only $16,800, its return on investment currently exceeds 793,233%. NXT’s success is largely due to its strong community of developers which makes it one of the most active projects. IOTA IOTA’s ICO was launched in November 2015 and the team managed to raise approximately $400,000. During the ICO, the coin was valuated at around $0,001, meaning that investors enjoyed a return on investment of around 260,510%. Ethereum Ethereum’s smart contracts gained a lot of attention because of their potential ability to streamline business processes in almost all industries. As a result, during the ICO that was held in 2014, the team managed to raise $16 million. At that time the price of Ether was of $0,311, which means that it achieved a 193,284% increase in value. The role of regulations As a result of the global nature of blockchain technology, cryptocurrencies find themselves in an area where traditional norms and laws can’t be easily applied. As we mentioned in our earlier chapter “What are ICOs?” - regulations vary significantly depending on the country the project is based in and, as an investor, the country you live in. However, the consensus in the crypto community is that regulations should be beneficial for both companies and investors, as long as they are not an unreasonably difficult to comply with. On one hand, regulations help assure investors that their cryptocurrency investments are protected just like traditional investments, like stocks. Companies, on the other hand, could benefit from regulations by seeing an increased level of interest from many of the traditional investors like venture capitalists and hedge funds. Once involved, these investors would be expected to provide not only more money but also an increased level of legitimacy to the ICO space.