You have probably heard of stories where some individuals have made millions from an investment of as low as $100. While it is possible, it is highly improbable by conventional means but there is one particular method that has significantly boosts the chances of hitting maximum gains. Buying into Presale crypto.
But what is presale crypto you ask? It refers to crypto assets that have not yet been listed on exchanges. Cryptocurrencies in the presale stage usually have different pricing stages. Getting in early on those stages guarantees a lower price than the price at which the asset will be sold. For this reason, presale crypto present opportunities for savvy investors that are willing to take on a bit more risk.
There are numerous benefits that can be had from investing in presale crypto. Let’s take a look at some of them:
- Early access provides investors with a chance to buy the asset at discounted prices.
- The low entry prices provide opportunities for high returns.
- Buying presale crypto automatically puts you in the project or asset’s community.
- There is a sense of exclusivity that comes with participating in crypto presales.
While these benefits are sweet, it is important to note that presale crypto is a double edged. Sword. Here are some of the challenges that come with presale crypto:
- Lack of liquidity limits tradability. The presale stage means they are not available on exchanges, hence lacking liquidity, which means one cannot sell their assets at this stage.
- Presale crypto is highly risky because it is new and untested. The risk of failure is quite high and many projects do not usually amount to much.
- Lack of regulatory protection increases the level of risk and this means the law will not protect you if you lose your funds.
- Uncertainty in valuation since there is usually no market data since they are not listed, hence their worth cannot be accurately assessed.
- Presale crypto have become one of the go-to methods that scammers use to trick people out of their money.
Understanding Presale Crypto
Now that you have a rough understanding of presale crypto, the benefits and risks, it is time to dive deeper. Let’s start with their purpose. Here are some of the reasons why presale cryptos exist:
- Crypto presales are ideal for projects to secure funding for development and marketing.
- They provide a route through which projects can build a robust community especially if it’s a project whose future they are optimistic about.
- They fulfil the need for early access to investors looking for the best opportunities.
You might also be wondering how crypto presales are different from the likes of ICOs, crypto private sales, and public sales. The reality is that they are somewhat similar in some aspects. However, ICOs represent the public phase where tokens are publicly available but not yet listed on exchanges. ICOs do not offer any discounts, unlike crypto presales. Public sales occur after the initial coin offering (ICO) before the coins are listed on exchanges.
Research and Due Diligence
Before you buy into any presale crypto, it is highly important (with heavy emphasis) that you conduct due diligence. Do not just buy into a presale because you heard about it or it had a cool name. Dive deep into the project to understand key aspects such as the team, their motivation, intentions and plans.
Conducting thorough research and due diligence in a presale crypto before aping into it could not only save you money, but also boost your chances of success. Here are some pro tips to consider when conducting due diligence:
Team background and experience
The success of a crypto project in the presale stage heavily hinges on the team, their qualifications and experience. It’s a huge plus if they have a track record of past successful projects.
Whitepaper analysis
Every legitimate crypto project aims to have a whitepaper that explains the scope of operations, as well as describing their product or service. Going through a presale crypto’s whitepaper is essential to understand more about the asset and the project in general.
Tokenomics an use cases
Legitimate crypto projects aim to have clear and concise tokenomics data. Understanding key tokenomics data such as the supply distribution, and vesting schedules could be the difference between a bad, good, or great project. If the crypto in question has a special use case, think of it as additional value.
Community engagement
Part of investing in presale crypto is to maximize your profit. No matter how good a project sounds on paper, it might not do so well if it does not have strong community engagement. Projects that have strong communities can attract a lot of investment.
Security audits
External audits are essential for that extra layer of security. Projects keen on this aspect not only demonstrate their willingness to make sure investors are protected, but it also highlights a focus on longevity.
Also Check : Meme Coin Presales
Choosing the Right Presale
If only finding the right crypto presales were as easy as a walk in the park or a simple search on the internet. However, like most good things, they are not that easy to find. One of the best ways to put yourself in the crosshairs of the right crypto presales is to keep tabs on websites such as FintechLoom which offer such insights.
We also recommend keeping close tabs on influencers that regularly highlight good projects. Especially those that have a proven track record of shilling reliable content. Such influencers usually have subscriber counts or followers. They can be found on platforms like YouTube or X (formerly Twitter).
Combine the factors we highlighted in the research and due diligence segment to boost your chances of choosing the right presale. For example, make sure they have a strong and active social presence, a clearly defined white paper, reasonable tokenomics, a special use case and favorable vesting schedules, as well as vesting schedules.
Participating in a Presale
Research and Due Diligence:
Investigate the presale project:
- Read the whitepaper.
- Check the team’s background.
- Understand the tokenomics.
- Look for community feedback.
- Ensure the project aligns with your investment goals.
Whitelist Registration (If Applicable):
- Some presales require whitelisting. Visit the project’s website and follow the registration process.
- Provide necessary details (e.g., wallet address, email).
Monitor Announcements:
- Follow the project’s official channels (Telegram, Twitter, Discord) for updates.
- Be aware of presale start dates and times.
Allocate Funds:
Participate in the Presale:
- Visit the presale platform or project website.
- Connect your wallet.
- Follow instructions to buy tokens during the presale window.
Confirm and Wait:
- Confirm your transaction.
- Tokens will be locked until the presale ends.
- Wait for the project to launch and tokens to become tradable.
Risk Management and Exit Strategies
Diversification
Make sure to spread out your investment across multiple presales or multiple segments. Avoid putting all your funds into a single project. Remember, not all projects succeed, hence diversifying will boost the chances of scoring on one or more.
Set Investment Limits
Establish the maximum amount you’re willing to risk in each presale. Ideally, do not invest an amount you are not ready to lose. Most importantly, do not invest funds that are essential for your needs. We stress heavily on not investing money for your rent, food or engagement ring.
Stay Informed
Regularly monitor updates from projects you are interested in, keep tabs on community discussions, and be on the lookout for any red flags. Be aware of any changes in the team dynamics or project dynamics.
Avoid FOMO (Fear of Missing Out)
Not every presale is a gem, hence no need to rush. Evaluate Maintain an objective approach to each presale and try not to be emotionally invested. FOMO may push you to make bad decisions.
Research the Team and Advisors
Conduct background checks on the team members, their experience, and previous projects. Make sure the advisors involved in the project have a healthy track record.
Security Audits
Find out if the project has had any security audits done by reputable firms. Audits highlight any vulnerabilities and encourage the team to maintain professionalism.
How to exit a presale crypto position
Exiting a presale crypto position if necessary is an important consideration. Most crypto presales turn into pump and dump schemes for early investors. You might also find out something that you don’t agree with during your research, prompting you to want to exit your position.
Remember we noted that it is not possible to sell an asset during presale due to liquidity constraints. This highlights the first major consideration if you want to exit. Keep tabs of the project so find out when the presale will end and asset be listed.
Listing usually takes place first on decentralized exchanges. It might be difficult to sell at desired prices if there are many people planning to sell on the first day of listing. Ensure that the exchange you intend to use has adequate liquidity for a successful exit. Connect your wallet to said exchange and swap your tokens for your preferred asset.
Conclusion
As you can see, there is a lot that goes into successfully buying into a presale crypto. It is not a walk in the park but a decision that requires thorough due diligence and proper planning. Following these guidelines may not guarantee a win but will put you on the right path where you may encounter healthy and promising presale crypto. As always, none of this information constitutes financial advice and we encourage our audience to proceed with caution.
