If you’re a novice, you’re probably considering getting in on the action, but how to invest in ICO?
For starters, a disclaimer – Bitcoin, Ethereum, and other cryptocurrencies can be a sure way to pay for items or as an investment alternative. But investments can go up or down, thus you can gain or lose money anytime.
To put it simply, proceed with caution. With this in mind, the rising popularity of cryptocurrencies is an exciting moment for technology. Even if you don’t intend to participate in the revolution, it’s worth knowing how it all works.
Let’s begin where most investments start – the wallet.
To participate in ICOs or cryptocurrency trading, it’s important to have your own wallet. An exchange account such as Kraken or Cex.io does qualify as your own wallet, as you don’t control their private keys. Participating in an ICO requires you send Bitcoin or Ether from your personal, private wallets.
If you send it from an exchange you will not get the ICO tokens. This is because the transfer originates from the wallet of the exchange and technically you’re not the owner of any wallets on the exchange. The use of Ether is recommended as it’s the base cryptocurrency as many ICO coins are compatible with the Ethereum standard – ERC 20, whilst the most convenient wallet is MyEtherWallet (MEW).
The Exchange Account
After performing your research, and you’re confident enough to proceed with participating in an ICO, you can then open a fiat accepting cryptocurrency exchange account. It will help you convert your domestic fiat currency into Bitcoin or Ether.
Despite the cryptocurrency markets maturing in recent years, a lot can still go wrong. Software errors could wipe out your bitcoin storage, while the possibility of user error can send your cryptocurrency into the abyss. Hackers can also break in and steal from you as it happened to Mt.Gox – one of the largest bitcoin exchanges at its prime
Participating in ICOs using Exchanges
If you’re looking for your first exchange, a good choice is US-based Kraken or London based Cex bitcoin exchanges. Both exchanges allow you to deposit fiat money from a bank account or MasterCard (Cex), and trade Bitcoin, Ether, and Litecoin.
Opening an account on both exchanges is as simple as typing your email address and creating a password. Some additional steps will get you going on fully utilizing and unlocking all the features of your new account. None of the steps involved is uncommon in other major exchanges. Both exchanges accept registrations from around the world, although some site features may be unavailable depending on the laws of your current country of residence.
The verification process is straightforward, but Kraken can be a bit strict when it comes to higher tier verifications. Kraken has four tiers with the first two taking only a few minutes. It can take longer if the application requires manual review. Tier 3 verification can take a few days to complete.
Account verification on Cex removes any limitations and amount restrictions. This gives you the freedom to move and trade, sell and buy in limitless quantities.
Depending on your verification level, funding of your Cex Bitcoin Exchange account can be done in several ways. Users can deposit funds or buy Bitcoin and Ether using their bank-issued visa or MasterCard. A Higher level of verification allows you to utilize your bank account directly. Kraken doesn’t allow users to deposit, withdraw or trade without verification.
Kraken offers roughly ten different cryptocurrencies for trading, though you can still make direct trades between all available pairs. In conjunction with five fiat currencies, the exchange gives adequate trading options for users.
CEX users can buy Bitcoin directly from the Exchange. The Exchange has 4 preset options, while a fifth option allows you to input a custom value you wish to buy. The fee for buying Bitcoin on Cex is 7% of the buying price.
Participating in a Token Sale
1. To participate in Change’s token offering, you’ll need some Ether, which is the cryptocurrency of the Ethereum blockchain ecosystem. Here is how you can use Kraken and Cex exchanges together with MyEtherWallet in such an investment:
- Before you buy Ether, you first need to register an account with Kraken or Cex
- Once you set up your account and log in, go to “Funding” and then “Deposit”
- Select your deposit currency from the menu and complete the deposit
- After you have fiat currency in your account, you can proceed to buy some Ether. Choose the ETH/fiat currency pair and place your order.
2. Once you receive Ether in your account, withdraw it to an external wallet immediately. This is because you cannot participate in the ICO from an exchange wallet. You can use MyEtherWallet, Mist, Parity or MetaMask. Ensure you’re always in control of your private key.
3. After your wallet is set up, log in to Kraken or Cex, copy your wallet address to the Ether withdrawal field and complete the withdrawal. The process will buy Ether successfully from the exchange and send it to your external wallet.
4. Access your external wallet on its respective URL to confirm you’re on the correct website to avoid clone sites.
5. Click “Send Ether and Tokens” from the bar, then insert “to Address” in the next step. To view the funding address, enter your wallet’s “public address” into the form for it to display.
6. Copy paste the address directly to avoid a fake address from scammers. Once you enter the Ether amount you want to send, set the gas limit to 250,000.
Trading 212, the trade name for Avus Capital, is a broker-dealer with an app that is the most downloaded trading app in the UK. The company provides complete trading operations with markets in some 2,500 instruments ranging from shares to commodities.
Trading 212 also added cryptocurrencies to the mix, helping it attract a younger crowd. Customers not only deal in Bitcoin and Ether but also in Ripple, Bitcoin cash, dash, Monero, and Neo.
Other CFD, spread betting, and forex brokers have been getting in on the action. They include Avatrade.com and Trade.com forex brokers. Another is InterTrader, which allows dealing in Bitcoin and Ether.
Then there’s UK spread betting behemoth IG Group – a pioneer in CFD and spread betting bitcoin products. As interest in crypto grows, new trading apps from brokers such as Trading 212 and others proves there’s a big market for familiar brokers to gain exposure.