Crypto presale is offered by projects for two main reasons – one, to get funded, and two, to build a community of members who later get rewarded for trusting the project in its early days. Crypto presale is now seeing a growing popularity in the ecosystem as all the sectors note their broader adoption. This includes DeFi, NFT, and GameFi.
However, it is also important to understand different strategies that one must follow before participating in a crypto presale. The main objective should be to maximize returns after a certain time and not lose funds altogether. This article offers a piece to guide readers with every step when they participate or Invest in crypto presales.
How to Create a Crypto Presale Investment Strategy?
Investments in crypto presales require investors to develop a strategy that works in every situation. This pertains to experienced and new investors alike since funds are at risk in the market if founders and developers decide to close the project’s doors.
- Start by researching about the project. This includes knowing details about developers and founders via platforms like LinkedIn and X.
- Review the Whitepaper, as it mentions the potential objectives and goals of the project.
- Participate in forums to discuss its future projections with others. Chances are that the project looks attractive at the moment but is likely to lose its charm eventually.
- Revise self-assessment, including risk evaluation and investment limits. Presale tokens may be worth, say, $500, but personal capacity could be of investing just about $100. It is ideal to leave it and explore other options.
- Finally, payout terms should be reviewed at the time of creating a crypto presale investment strategy. Founders may have decided to make a payment when the select phase is done or when a certain target has been met.
Crafting investment strategies for crypto presales is more of a personal idea. It may differ from one investor to another.
Benefits of Investing in Crypto Presales
Of all the advantages, three main benefits of investing in crypto presales truly make it worth it.
- Tokens are rolled out at a discounted price. Presales offer tokens at a lower price than when they become available to the public.
- Crypto presales allow investors access to details about the project right from the early stages. This is the time when the crypto project has not gone mainstream and is still being developed.
- Finally, crypto presales allow community engagement by sharing feedback and influencing the project’s future direction. One may contribute by pitching a better UX or integrating a payment mechanism.
Other benefits of investing in crypto presales are strategic positioning and exclusive bonuses, such as additional tokens or higher rewards for staking.
Steps to Invest in Crypto Presales
The process of investing in crypto presales has seven steps, as mentioned below.
Research the Project
This includes researching information about the project and its team of developers & founders. A lot of information is made available on the official website itself; however, one should dig deeper by searching for information on social media platforms or research platforms where papers are published. Factors that should be evaluated are market potential, project goals, and competitive landscape.
Choose a Presale
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Find a suitable presale through different platforms like social media platforms, research platforms, and crypto news websites. These often showcase a crypto presale list with basic details about the project, its commencement date, and presale end date. Choose only if the project aligns with your personal investment objectives.
Set Up a Cryptocurrency Wallet
There are two types of crypto wallets, and selection should be made according to individual preferences. Hardware and Software crypto wallets are the two types, with the hardware crypto wallet being more popular because of its offline storage and security aspects. Some of the crypto wallets are MetaMask, Ledger, and Coinbase Wallet.
Acquire Necessary Cryptocurrency
Necessary cryptocurrency, here, refers to the one that is acceptable by the relevant project. Ethereum and Bitcoin are usually the most accepted crypto tokens in the sphere. They can be purchased on any crypto exchange platform, such as Binance, KuCoin, and Coinbase, to mention a few.
Join the Whitelist or Register
A whitelist is a list where all approved participants appear ahead of the crypto presale. Selections are made on criteria that differ from one project to another. They help in onboarding the presale stage along with other investors, mostly in a phase that offers the highest discount for the token.
Complete KYC/AMLRequirements
KYC and AML requirements are mandatory. They allow the crypto presale platform to know their customers better while ensuring that the project is not being, or will not be, used for the purpose of money laundering. Complying with KYC/AML requirements helps the crypto presale project and authorities safeguard large interests in the worst-case scenario.
Participate in the Crypto Presale
The final step is to participate in the token presale via investment. Most of the crypto presale projects require cryptocurrencies instead of fiat currencies to help investors from across the world come together without worrying about the conversion of their fiat currency. Manage investments by understanding when and how returns will be rolled out. Plus, review the time investors have to hold on to their share before selling the token after public launch.
The steps mentioned above for participating in investment to crypto presale apply to a large number of projects. The steps may change their orders based on individual preference or understanding, but they remain the same.
Risks and Considerations
There are several risks and considerations associated with crypto presales.
- Market volatility can hamper the predicted return if the token’s value decreases. This is often fueled by immediate selling that some presale participants may take for profits.
- A large number of players are venturing into the landscape of crypto presale. Most of them are taking the benefit of lack of education to fool around and drain funds from the system.
- Consider exercising due diligence and researching the crypto presale project before investing. Allocate only that portion of the portfolio that one can afford to lose and, hopefully, quickly recover through different sources of investments.
Crypto presales to fetch returns, but it is essential to be careful about malicious activities that may put a dent in financials.
While it’s true that crypto presales offer unique opportunities for early investors, it’s important to understand how they compare to other cryptocurrency fundraising methods. Each method has its advantages and potential risks.
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To understand the various investment options available in the cryptocurrency space, be sure to check out our in-depth comparison: Crypto Presale vs. ICO vs. IDO vs. IEO. This guide will help you make informed decisions by exploring the key differences between these investment strategies and determining which one aligns best with your investment goals and risk tolerance.
Conclusion
Crypto presale investment requires one to follow a thorough structure to prevent loss in any manner. It is a great way to secure tokens that will eventually allow investors to take profits home; however, it is equally important to understand how to navigate one’s way around the complexity of the crypto presale process.