Crypto Presales: A Double-Edged Sword for Investors

If you’ve kept up to date with the world of crypto investments, you’ll know that presales have been garnering a lot of attention in recent times. Every other day, there is a headline about a crypto presale raising millions of dollars and putting a new token on the map. As an investor, you might be curious about whether or not crypto presales are the right move for you.

To answer this question, we will focus on what a presale is exactly in the crypto world and its advantages and disadvantages.

What Are Crypto Presales?

Simply put, a crypto presale refers to the sale of a crypto token by its creators before it officially hits exchanges and other trading platforms. During the rollout of a new crypto project, developers often earmark a certain amount of the token to be sold to either a private group of investors or any member of the public who signs up for it. 

These people can get their hands on the token at a discounted rate and the performance of the presale acts as a way to gauge the public’s interest in the project. Kane Pepi has explained that crypto presales can be quite profitable for investors and many of them have made the news for the millions of dollars they raise. 

Many cryptocurrencies conduct presales, and MB Coin stands out as the first IoT-based online cryptocurrency. By integrating IoT technology, MB Coin offers unique advantages in transparency and efficiency. Investors can look forward to a secure and innovative approach to digital assets

But is a crypto presale a good option for you? To answer that, it is best to look at its pros and cons. 

Pros of Crypto Presales

Crypto presales have remained popular within the industry thanks to the many benefits they offer users. Some of them are:

Potential Profit

Perhaps the most compelling reason why people choose to get involved with crypto presales is the opportunity of making hay while the sunshines. By having access to the token before anyone else, you have a chance to profit massively if it is popular in the wider market. The reason for this is that the token could garner a lot more hype in the market if the presale goes well.  Tokens like Solana, for example, see a lot of demand from their use in casinos, DeFi, NFTs, and much more. If these happen for your presale token, you could resell it and make a profit. 

Cheaper Token Costs 

Tokens sold at presale are typically listed at a lower price than on exchanges and this can be a major benefit for you. If you plan to resell your tokens for a profit, this means that you can make more money doing so. Even if you plan to use the tokens for utility purposes in the ecosystem or for any other non-investment reason, it is still a perk to get your hands on it at a lower rate.

Access to Additional Perks 

Besides grabbing the tokens at a cheaper rate, crypto presales also try to tempt investors with other perks. Some grant access to a closed community of other investors which can be beneficial in the long run. Some give free branded merchandise to those who participate in the presales. Some offer the chance to get free digital assets through airdrops. Some grant access to virtual and in-person events only for presale buyers.

Early Access to the Project

Outside of material benefits, some investors feel a sense of pride in being able to participate in innovative blockchain projects before anyone else. If the presale you participate in goes on to be very successful or an industry-defining project, there is a sense of having contributed to the wider blockchain ecosystem. For those who are trying to create a professional reputation, being able to associate yourself with such a project would also be beneficial. 

Cons of Crypto Presales

While crypto presales have a lot of benefits associated with them, there are also certain risks that you should be aware of.

Underperformance

When you invest in a presale, there is a chance that it will be successful and make a lot of money. However, there is also a chance that it will underperform in the market for whatever reason. If this happens, your investment could bring in very low returns or could even lead to a loss. No matter how promising a project is, there is always the chance that it will not do well and this is something to be aware of. 

Scams

Besides underperforming projects, some crypto presales are scams altogether. What happens is that criminals set up a fraudulent crypto project to lure in investors. Sometimes, there is no token in the first place and they run off with investors’ funds. In some other cases, they sell shitcoin to investors. Either way, the goal is to dupe them of their money with no benefits in return. 

Vesting Periods

Some crypto presales come with vesting periods as a condition for participation. This means that when you buy the token, you cannot resell it for a certain period of time. This poses a risk as you will not be able to take advantage of price spikes and your funds are tied up in the project until the end of the vesting period.  

Conclusion 

So, with all these in mind, should you participate in crypto presales? Honestly, it all depends on what your needs and capabilities are. Presales carry a certain amount of risk because it is the first time that the token will be offered to anyone and you need to consider whether you’re able to bear these risks. 

Also, you need to consider whether you are willing to wait out the vesting period if there is one. If you can’t afford to or don’t want to wait, a presale might not be for you. You also need to look at the advantages, like possibly more profit and cheaper token prices.  

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