Create a FREE account and...
Manage your own Watchlist
Access all education lessons
Converse with other crypto enthusiasts
Be a part of the Interactive Crypto Community
OR
Please fill out the required fields Please fill out the required fields Please fill out the required fields
Get Into Cryptocurrency Trading Today
Both established and starting companies need money for operations. Even though they can get funding from private investors, public offerings are quite lucrative. Companies have mostly relied on Initial Public Offerings (IPOs) to raise funds.
The IPOs have elaborate regulations with several documentation. They tend to be costly to set up in the long run.
The entry of blockchain has come with the age of Initial Coin Offerings (ICOs). For ICOs, a company sells token to potential investors. Investors then seek to gain later when the project becomes successful. Setting up the ICO is hassle-free and more accessible.
Still, both IPOs and ICOs have security risks. This article looks into the safest.
Let's get to it;
Introduction stage
IPOs occur when the company is already running and established. By then, the investors know what they are getting into. The companies, at this point, do need long-term capital, not development funds.
ICOs occur at the earlier stages of the company. At this point, the company is yet to have a concrete blueprint for development. The earlier stages offering makes it riskier.
Regulation
The regulations between the two investment options differ. The Securities and Exchange Commission regulates IPOs. ICOs, on the other hand, work on self-regulated blockchains.
Even with the difference in regulations, both means possess risks of scam. They have both had cases of scams before. You have to do due diligence before investing in either.
Listing Requirements
Investors can put their money on an ICO even without the underlying token. It is all in the principle of good faith. There have been instances of tokens failing to take up. IPOs, on the other, must provide for verifiable listed shares. The investor can rely on share performance when making an investment decision.
Allocation
The decentralized nature of blockchains means there is no central control. It is a free market where one buys tokens depending on ability. This has seen the rise of whales who can control the market prices. IPOs, however, come with allocation control. The regulation uses various methods to ensure fair asset allocations.
Investor Requirements
IPO is an ideal investment when the company of interest is in your country. The process of acquiring such shares is straightforward. It gets a little complicated when investing in foreign companies. You might have to use a broker due to the additional requirements.
Investing in ICO is quite a breeze. All you need is access to an internet connection. You are free to invest in projects from anywhere in the world. An exception is on securities for the US, also if you are in countries that ban cryptos.
Utility (Investor Profits)
Acquiring stocks of a project through shares allows your stake in the company. You earn dividends depending on company performance. You can also sell the shares when the values increase.
ICOs don't guarantee ownership of the project. The whitepaper of the project details how the investors will gain.
Looking at the difference between IPOs and ICOs, it's easy to conclude IPO is the safest. You might think the regulations keep you safer. A company can still fail even with the legal requirements and documentation. Investing in a promising ICO comes with the needed profits, yet with less bureaucracy.
The only way to ascertain the best option is to look into their pros and cons. Here are the benefits and concerns for both;
IPO
IPO comes with several benefits like reliability. You invest in a known asset with no expectations. It also comes with legal requirements from regulations hence customer peace of mind. The presence of company records also allows for ascertaining the real value of the company.
It also comes with significant issues like complicated registration. The investor is also limited to the amount and country.
ICO
Like IPO, ICOs also come with several benefits. It is a fast investment method. There is no chain to follow or legal requirements. It is also great for small investments as it does not provide for limits. Being the sole controller of your assets also means you choose the risk you wish to incur.
The only concern with ICOs is the possibility of od loss from scams projects.
Until this point, the IPOs still seems to be the most secure due to regulations. Still, there is a case for the ICOs. Digital currencies have been gaining market traction. They are fast becoming mainstream. The more they become widespread, the more regulations become a necessity.
The hype surrounding virtual currencies has by now gone down. The regulations are taking over. Already, some projects have listed their tokens with the SEC as securities. However, they still go with the ICO option due to the flexibility and speeds it comes with.
The use cases of digital assets are becoming more by the day. The shares from the ICOs can be part of an autonomously executed program. These systems are free from any human interference. For that, you can always believe the results on the performance of the tokens.
The decentralized nature of blockchains also makes ICO valuable for any investor level. The small investors don't have to worry; then big ones would rule in their favor.
The security of the ICOs is also excellent on its flexibility. Even though a new system, their use is not limited to startups. Even the existing companies can use it to raise funds. It's even convenient for them as they are easier to evaluate.
ICOs have proven to be a reliable way to raise funds. They come with more use cases and improves innovation. The only concern is the scams and other malicious users, giving it a bad reputation. The industry is headed for more regulations; hence it will be safer than ever.
Every investor is always after a return on investments. The only way to ensure the returns is by investing in safe assets. Both IPOs and ICOs are reliable fundraising means for companies. The investors gain part of the company through shares.
Even though IPO has been operational for longer, the ICOs are becoming the main deal. They come with ease of investing and decentralization. They are also getting more secure as blockchain become more regulated.
Create a FREE account and...
Manage your own Watchlist
Access all education lessons
Converse with other crypto enthusiasts
Be a part of the Interactive Crypto Community
ALL
TRENDING
WATCHLIST
Total Market Cap The Total Market Capitalization (Market Cap) is an indicator that measures the size of all the cryptocurrencies.It’s the total market value of all the cryptocurrencies' circulating supply: so it’s the total value of all the coins that have been mined.
{[{ marketcap }]} {[{ marketcapchange.toLocaleString(undefined, {maximumFractionDigits:2}) }]}% (24H) {[{ marketcapchange.toLocaleString(undefined, {maximumFractionDigits:2}) }]}% (24H)
Symbol
Price Cryptocurrency prices are volatile, and the prices change all the time. We are collecting all the data from several exchanges to provide the most accurate price available.
24H Cryptocurrency prices are volatile… The 24h % change is the difference between the current price and the price24 hours ago.
Trade
{[{ item.name }]}
{[{ index + $index}]}
{[{ item.pair.split('_')[0] }]}
Ƀ{[{item.price.toLocaleString(undefined, {maximumFractionDigits: 5}) }]} ${[{item.price.toLocaleString(undefined, {maximumFractionDigits: 5}) }]}
{[{ item.change24.toLocaleString(undefined, {maximumFractionDigits: 2}) }]}%
{[{ item.change24.toLocaleString(undefined, {maximumFractionDigits: 2}) }]}%
Symbol
Price Cryptocurrency prices are volatile, and the prices change all the time. We are collecting allthe data fromseveral exchanges to provide the most accurate price available.
24H Cryptocurrency prices are volatile… The 24h % change is the difference between the current priceand the price24 hours ago.
Trade
{[{ item.name }]}
{[{ index + $index}]}
{[{ item.pair.split('_')[0] }]}
Ƀ{[{item.price.toLocaleString(undefined, {maximumFractionDigits: 5}) }]} ${[{item.price.toLocaleString(undefined, {maximumFractionDigits: 5}) }]}
{[{ item.change24.toLocaleString(undefined, {maximumFractionDigits: 2}) }]}%
{[{ item.change24.toLocaleString(undefined, {maximumFractionDigits: 2}) }]}%
Binance´s Launchpad Gears Up Tor Arkham Token Sale, Starts Recording BNB Balances
4 months ago | Benzinga
Arkham´s New Crypto Intel Trading Platform: A Game Changer For Traders?
4 months ago | NewsBTC
Bitcoin Could Rise to $120K by End-2024: Standard Chartered
4 months ago | Coindesk
Bitcoin Edges Lower; Bone ShibaSwap Becomes Top Loser
4 months ago | Benzinga
JustBit Casino Review
JustBit Casino, which specializes in virtual currencies, is easy to use because withdrawals are expl...
Huobi Token General Overview
Is Ripple The Cryptocurrency of 2021? - In Depth Review of Ripple XRP
Ethereum Classic Review
Monero General Overview
YouHolder
YouHodler is not just another player in the crypto space; it's a dynamic and innovative company ...
XBO
XBO.com cryptocurrency exchange redefines how you interact with crypto. Designed to make the benefit...
Bithumb
Understanding Bithumb This article highlights what is Bithumb and where it is located. It also di...
Bitstamp
Bitstamp's continued success in the crypto market This article highlights what Bitstamp is. I...
Bitfinex
Bitfinex general overview delves deep into its operations since its inception in 2012 up to date. It...
(adsbygoogle = window.adsbygoogle || []).push({}); Introduction In t...
(adsbygoogle = window.adsbygoogle || []).push({}); Einführung Wenn es um Er...
Mobi
Are you someone who makes international payments regularly using Bitcoin? Or do you travel a lot and...
Bitcoin.com
Bitcoin.com is a free downloadable Bitcoin wallet that allows users to trade and receive Bitcoins. T...
BTC.com
Created by Bitmain in 2016, BTC.com is a leading open-source Bitcoin and Bitcoin Cash storage platfo...
ICOs Safer Than IPOs? Discover the Reasons
Both established and starting companies need money for operations. Even though they can get...
It’s now possible to trade Bitcoins on Robinhood exchange
If prices are dropping for some cryptocurrencies, things aren’t totally dark, as some exchanges...
Pros and Cons of Crypto Exchanges
Cryptocurrency is a new form of currency that can be used to purchase goods and services around...
Shiba Inu (SHIB) Price predictions for 2022
Shiba Inu token was among the most famous cryptocurrencies in 2021. It is also the most volatile...
How high will Ripple go in 2021?
For years, digital currencies continue to gain popularity among investors. Ripple, one of the...
(adsbygoogle = window.adsbygoogle || []).push({}); Introduction In t...
(adsbygoogle = window.adsbygoogle || []).push({}); Einführung Wenn es um Er...
Mobi
Are you someone who makes international payments regularly using Bitcoin? Or do you travel a lot and...
Bitcoin.com
Bitcoin.com is a free downloadable Bitcoin wallet that allows users to trade and receive Bitcoins. T...
BTC.com
Created by Bitmain in 2016, BTC.com is a leading open-source Bitcoin and Bitcoin Cash storage platfo...
COMMENTS (0)