Initial Coin Offering

What Is an Initial Coin Offering? 

An initial coin offering (ICO) is the cryptocurrency industry’s equivalent to an initial public offering (IPO). A company looking to raise money to create a new coin, app, or service launches an ICO as a way to raise funds.

Interested investors can buy into the offering and receive a new cryptocurrency token issued by the company. This token may have some utility in using the product or service the company is offering, or it may just represent a stake in the company or project.

  • Initial Coin Offerings are a popular fundraising method used primarily by startups wishing to offer products and services, usually related to the cryptocurrency and blockchain space.
  • ICOs are similar to stocks, but they sometimes have utility for a software service or product offered. 
  • Some ICOs have yielded massive returns for investors. Numerous others have turned out to be fraud or have failed or performed poorly. 
  • To participate in an ICO, you will usually need to purchase a digital currency first and have a basic understanding of how to use cryptocurrency wallets and exchanges. 
  • ICOs are, for the most part, completely unregulated, so investors must exercise a high degree of caution and diligence when researching and investing in ICOs.