How to invest in blockchain ICOs?
[THE INVESTOR] Spotting the next “hot startup” is not an easy job for investors.
And when it comes to the burgeoning blockchain sector, it gets even more difficult as experts are still gauging the limits and possibilities of the nascent technology.
Then how should investors bet their fortunes on the blockchain and its related startups to make fair returns?
Seasoned angel investor and entrepreneur Will O’Brien who has invested in Telegram, Orchid, Civic and Insureum, Zikto’s blockchain-based insurance platform, among others, looks at mainly five things.
He was previously CEO and co-founder of US cryptocurrency security firm BitGo, serves as investor and advisor to many ICOs and blockchain firms around the world.
“First I look for the potential for ‘King tokens,’” O’Brien said at the meetup hosted by Seoul-based startup Zikto on Aug. 9. “What that means is I look for a company that can launch a token that would be the largest in that category, such as inside the verticals of internet of things, privacy, identity and insurance.”
Will O'Brien (right) and Ziggy Bak, CSO of Zikto
He emphasized the importance of a team, which can scale up to support the community around the large token.
Just like other industries, market timing is critical as well, he added. “If the market doesn’t need this business right now, it doesn’t need a tokenized version of this business.”
He also considers financial return and after-market liquidity as an important criteria. “In order for these tokens to succeed, there needs to be natural organic interest in the after-market liquidity, that there are more people who want to use it and the token is used in a natural way through the usage of business. Token velocity has to be increased over time organically, and not through artificial means.”
Lastly, starting early is essential. When he spots up-and-coming startups, he likes to invest and advise as soon as possible, to add value and be part of the token development and community.
Following O’Brien’s presentation, he joined a panel discussion, inviting local blockchain investors and experts. Hwang Sung-jae, CEO of Foundation X; David Suh, CEO and CFO of Zikto; Kim Sung-ku, CEO of Nexus One; and Kim Yo-han, COO of FactBlock, discussed a range of topics, including regulatory hurdles, ICOs and blockchain’s trend and future.
Zikto also made a surprise announcement on its listing debut during the meetup. On Aug. 16, its cryptocurrency Insureaum will be listed on CoinBene, a Singapore-based cryptocurrency exchange that ranks among the 10 largest in the world by trading volume.
“Beginning with CoinBene, we will list Insureum on other global and local exchanges,” David Suh, CEO and CFO of Zikto said.
Established in 2014, Zikto is best known for its wearable device Zikto Walk. The firm has been venturing into the insuretech segment, with Insureaum, which connects insurers, consumers and app developers, data firms to trade insurance-related data more easily and securely. Following the launch of Insureaum tokens in April, it raised 20 billion won (US$17.78 million) during the ICO, which was sold out during presales and private sale stage.
By Ahn Sung-mi (email@example.com)