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Our Guide to Starting out in ICO, IEO, and STO Investments – What to Know

The rise and fall of the initial coin offerings (ICOs) prove that its greatest vulnerability is ironically one of crypto’s most extensive appeals, which is its limited oversight and regulation. That’s why initial exchange offering (IEO) came to the rescue as successful ICO frauds became rampant, forcing investors to jump ship and participate in a reliable exchange platform such as IEO. 

Unlike ICO, IEO needs the appearance of a third party to conduct the exchange. This method makes it highly secure for investors, though the downside is that it requires high investment minimums and many account creations for various transactions. 

Fortunately, the market is shaken once more due to the arrival of security token offering (STO), allowing crypto assets and its legitimacy to come of age.

How is STO the Safe Answer to ICO and IEO?

As the moniker suggests, STO is supported by a tangible asset, such as the company’s stocks, on top of its approved licensing by the SEC and other regulatory bodies. This means that security coins provide the protection investors feel in traditional assets while making the most of the features from digital assets. 

If you’re one of the go-getters looking to invest in STO for your business, keep in mind that there are common mistakes made along the way in various industries. To that end, here are the pitfalls you’ll want to sidestep when shelling out digital coins for your business:

Mistake #1: Anthropomorphizing the Market 

Many beginners tend to attribute human qualities to the crypto market. However, people should remember that an agency does not run it, nor should it be approached as a competitor. This will result in a fundamental misunderstanding of the inner workings of the market, which should be regarded as a sum of all economic transactions rather than an entity. 

Mistake #2: Unwillingness to Diversify

Diversifying your investments is crucial in cryptocurrency trading as you are more likely to lose it all if you bet it all in one go, under one umbrella. There’s a reason why the idea of diversification has always had a positive connotation, and age-old sayings such as ‘Don’t put all your eggs in one basket’ proves there is wisdom in old cliches. To that end, diversifying your trading makes you more to lose some rather than all, which also means you gain something in the process. 

Mistake #3: Panic Selling

When it comes to trading, especially with a fickle market and fluctuating price movements in cryptocurrency, it’s crucial to have an iron will to handle tough times. With that in mind, it’s vital to avoid panic selling when prices drop, and the going gets rough for you as in crypto, your investment can quickly go up again.

While it’s good to cut your losses before it worsens, in cryptocurrency, your investments are technically not losses until you sell them. Buying them high and selling them low is a big mistake as it is like throwing away your money for nothing, which is why it’s essential to have the necessary knowledge on how to navigate cryptocurrency and invest wisely.

ICO vs. IEO vs. STO: Which One is the Best For Investments? 

All methods are designed to cater to each investor’s abilities. While ICO is generally phasing out, new alternatives such as STO, IICO, SAFT, and even cryptocurrency airdrop are rising in the cryptocurrency market. It’s ideal for those who want to invest small with an option for fast cashouts.

Meanwhile, IEO is an excellent method for big-time investors who are looking for serious and reliable opportunities. Finally, STO is the new name of the game as it provides a real-life structure within the cryptocurrency industry for better security and legitimacy. No matter the choice, the guide above should help you get started on your investments on the right foot. 

If you’re looking to learn more about ICO, IEO, and STO investments, get in touch with us today to see how we can help.