The financial market is a dynamic environment that goes through ups and downs in cycles. The…
Crypto presale is part of a new crypto project’s advertising. Developers of new cryptocurrencies have to go extra lengths to get noticed and holding a crypto presale is one of those ways.
This blog post will explain more about crypto presale and its role in the success of new crypto tokens.
Crypto Presale Definition
A cryptocurrency presale is an event where tokens are sold to interested investors ahead of the scheduled initial coin offering (ICO) release. Only selected buyers can participate in a cryptocurrency presale.
In this phase, the presale tokens are still under development. Thus, the funds that the development teams aim to raise in a presale are slightly lower than the actual ICO.
Why Does a Crypto Presale Happen?
Development teams hold a crypto presale since there are many investors that actively seek new crypto projects that sell tokens at a reduced cost. Aside from that, here are four other reasons why crypto pre-sales occur.
First, it helps them attract the attention of angel investors. Having an angel investor not only increases a crypto project’s funds but also gives the developers a change to receive guidance from seasoned investors. Also, they have higher chances of receiving private venture capital at a lower price.
Second, it is one way of testing the waters. The token creators can assess the interest among their target clients. Initial users’ feedback is beneficial for the further improvement of their token.
Third, it can also function as a form of market survey. Offering a presale token can be similar to conducting a case study. The project creators can then use the results of the market survey in analyzing their target market’s preferences and needs.
Lastly, it can work as a beta introduction. Since the crypto presales offer their token to a very specific population only, the bugs that will be discovered during this stage will not harm the project’s reputation. The developers still have time to rectify it before the public sale happens.
Kinds of Cryptocurrency Presales
There are two major kinds of crypto presales: investor only and open-for-all. Here are the distinctions of the two.
Investor-only presales are accessed only by the wealthy crypto investors who can afford to contribute huge amounts to the project. Wealthy crypto investors often pump big investments into worthy crypto projects because they know they can reap massive profits from it once the prices soar upon its launching.
Retail investors can participate in this kind of presale. However, a big chunk of tokens don’t sell because many investors find it difficult to trust projects that are not yet complete.
When one joins a presale, they are participating to invest in a building that is under construction. Until its thorough completion, it is difficult to tell whether it will succeed in the long run.
Advantages of Crypto Presales
For the most part, cryptocurrency presales usually benefit both the developers and investors. Here are some benefits of a cryptocurrency presale.
Developers can catch the interest of investors if their token addresses a specific need or want. If many investors see the potential, others will follow suit and this will raise significant capital for the crypto project.
However, if the investors don’t give their attention and money, it can be an indicator that the token doesn’t meet their preferences. This can help the developers take a step back to understand what the crypto market needs.
This is one of the primary benefits of joining a presale. Sometimes, the discounts on tokens can reach up to 50% off.
Wider Marketing Reach
A successful presale can make a new token very popular. More funds will mean better advertisements for the new cryptocurrency token. Since the developers can afford additional staff, they can now consider hiring a marketing expert to help them promote their invention.
Exposure to media
Having media coverage can also expand one’s reach worldwide. That way, the new token can receive support from a diverse group of investors.
Disadvantages of Presales
Presales can be the starting point of scams such as rug pulls. Cryptocurrency assets that have not proven themselves yet may turn out to be the next big thing or the biggest disappointment.
Majority of the cryptocurrency wallets are held in the crypto exchanges. What stands between one’s wallets and cyber criminals is only the exchange’s security protocols. Many exchanges have already been victimized by hackers with millions stolen from their platforms through different crypto scams and attacks.
Presale prices are considered a bargain in the crypto world. Nevertheless, those discounted prices might take a downward trend after the ICO launches. When people realize that the hyped token does not have any real-world application, they might withdraw their investments or sell out.
Participate Safely in a Crypto Presale
We know that participating in presales and ICOs can be very exciting especially for beginners who are trying to build their profile and gain profit from it. But, it is best to scrutinize every crypto project that you come across.
If you encounter a crypto project that looks promising and many people support it, research about it right away. Look for the developer’s histories, their whitepaper and timetable.
Also, it is helpful to check the cryptocurrency exchange that they will be using since you will need to connect your wallet to that platform should you decide to purchase.
Presales to Watch Out For
There are emerging cryptocurrency projects that investors can buy this 2023. One of the popular new crypto games is Meta Masters Guild. Also known as MEMAG, this game is a play to earn (p2e) game.
Another notable crypto token is the CCHG token of the C+ Charge Ecosystem. It is an Ethereum-blockchain based token that drivers can use to pay in charging stations. Furthermore, users can earn crypto by gathering carbon credits and holding on to their tokens for a longer time.
Not all projects are worth the risk. But, some truly pay off in the long term such as Tezos and Filecoin. However, the cryptocurrency presale is a safer venue to explore investing options instead of diving right into the ICO.
If you want to know more about the latest cryptocurrency presales, check out websites such as CoinMarketcap and Icodrops.
However, always remember to DYOR Cryptocoin Believers!