Cryptsy continues to carry on its chatter on the web as a reminder that an early access can be exciting and yet hazardous simultaneously. It is the same tension that drives crypto presales. So what is a crypto presale? It is an initial round of fundraising during which a new venture sells its tokens prior to its appearance in the stock markets. Buyers get first dibs. Usually at a lower price. The concept is quite straightforward: early investment, later profit. But simple doesn’t mean safe. Follow global blockchain updates and view information on Cryptsy.
Consider a prelaunch investment as an investment in a startup prior to its establishment. The team presents a vision. Maybe it’s a new blockchain. Maybe a gaming platform. Perhaps a financial device based on smart contracts. They release a whitepaper of goals, token supply and plans. Then they give tokens by degrees. Stage one is cheaper. Stage two costs more. The increased cost brings about a sense of urgency. Hurricane people stampede in the ground floor as no one wants to miss the ground floor. There is nothing like scarcity to motivate. Add countdown timer and wallet watches open.
Why do projects run presales? Funding. Building software isn’t free. Marketing isn’t free. Applause is not the motivation that developers work with. Presale is a capital raise prior to opening. Early buyers in turn are willing to risk more. The product could be in its development stages. Not all the features can be on paper. There the religious comes to the guessing. In case the team delivers and the demand increases, the early tokens may increase in value. When development falters the price may decrease rapidly. Markets are blunt. They reward action and penalize tardiness.
Plain talking is due to the risk side. Some presales flop. Thin liquidity may occur after trading has set in. The initial investors can sell fast to secure gains. Pricing pressure can be very tough. In the worst scenarios, projects vanish after gathering finances. It happens. That’s why research matters. Read the whitepaper closely. Study token distribution. When the insiders possess a huge share, have short lock ups, then consider. Determine if the team is a public or anonymous team. Transparency builds trust. Silence creates doubt.
It is emotional more than one thinks. The desire to feel like you are missing out on something spurs much presale purchases. One of my friends claims, this may be the next big thing. It is enhanced by social media buzz. You feel the clock ticking. Slow down. Ask yourself simple questions. Are you aware of the project? Are you in a position to lose the money? Presales are dangerous speculations in fancy clothes. They are able to provide high returns. They are also capable of expensive lessons. Get at them with good eyes and good hands. Being first is thrilling, but when to do it does not necessarily mean a profit. Performing, patience and a disciplined decision-making is much more important than hype.