Crypto, like in most markets of the world, has its ups and its downs. In recent months, though, the trend has been mostly down. While this may scare off some, smart investors may see great opportunities in the chaos. Investments made today may pay handsomely months or years down the line when the markets take a turn and prices begin to rise. After all, buying at lows has historically proven to be far more profitable than buying at highs.
Once you have decided that investing is the right decision for you, you may be wondering where would be a smart place to keep that money so that you can come back later and see that it has grown. Many projects in crypto offer big promises and token prices that rise to the moon in days. Unfortunately, many of these promises fizzle out as quickly as they were made and then trend toward zero. This is why, in crypto, it’s imperative to pick investments that show promise and a high potential for the future. An investment that may offer such potential is Internet Computer, or ICP for short.
Keep in mind that the contents of this article do not constitute any sort of investment advice, and all contents of this article are based on history, educated opinions of the writer, or both. To find out if the Internet Computer is a suitable investment for you, you should always do your own research and only invest what you can afford to lose. If you need money to pay for this month’s rent, don’t invest it!
Let's Get Some Basics Out of The Way
What is ICP?
Launched in May of 2021, Internet Computer is a coin with a network by the same name that enables users to make and use decentralized applications or dApps. dApps run on the Internet Computer, and through them, users can do a wide variety of things. Some dApps let you interact with financial products like other tokens; other dApps allow you to trade Bitcoin, Ethereum, and other things or post on social media applications, similar to Facebook or Twitter. If you can think of it, it can be run on the internet computer in a decentralized way.
Decentralization is essential because it means that it can never be censored. While a country can block you from accessing Facebook, Google, or Youtube, they cannot block you from accessing decentralized applications running on the Internet Computer. This promotes freedom and makes sure that your funds are never locked due to government or corporate interference. It also means that anyone can create and host an app on the Internet Computer, lowering the barriers to entry for financial freedom.
What Makes ICP Valuable?
ICP’s value comes from its strong “tokenomics,” which is a combination of the word “token” and “economics.” Tokenomics refers to the way with which supply and demand are managed and the various uses that a token can have in its economy, creating new and sustainable demand.
The ICP token has many uses, giving it strong demand, which leads to an appreciation in price. One primary use of ICP is that it is used to pay for “cycles.” Cycles are the resources that dApps consume in order to run. You can think of cycles as the gasoline or fuel that dApps and users alike must consume to do useful work on the Internet Computer. Also, similar to gasoline, the ICP tokens that are used for this purpose are burned. In this context, burned means that they are permanently removed from the supply. In other words, the more people use the network; the more scarce ICP becomes, a double-positive effect on the price of ICP!
ICP is also used to vote on governance proposals. Governance proposals are ways in which the users of ICP can come together and vote for ways to improve the platform for everyone. One example of a governance proposal is to increase or decrease the cost of the aforementioned cycles. In exchange for voting, users are granted more ICP to encourage participation.
Bitcoin integration is coming to Internet Computer which should act as the next growth cycle.
Lastly, ICP is also used as a store of value or as a potentially appreciating investment. Since it is used across many decentralized applications and shows growing interest over time, many people want to hold the asset as it may appreciate in the future should demand increase. Holding ICP can make for an excellent potential store of value since price moving up can make your investment worth more.
Is It Smart to Invest in ICP Right Now?
This is the million-dollar question! If anyone knew the answer to this, they would be a very wealthy person in a short amount of time. The truth is, nobody knows when it’s a good time to invest in anything. However, that shouldn’t stop you from investing. Though you cannot know if the price will continue to fall, you also don’t know if we are already at the bottom, and tomorrow prices will begin to rise again.
Looking at the market and the world in general, it’s hard to say investing, in general, is attractive at the moment. With asset prices, both traditional ones like stocks as well as crypto falling, it looks like a scary time to commit money to anything. On the other hand, historically, when things looked like they were at their worst, those times proved to be the best moments to invest. Currently, ICP is trading at $7.63 at the time of writing. This is far off its initial highs that faded once the token was released. The wider market is also significantly down, with Bitcoin being 57% off its all-time high.
That being said, the smartest way to invest in any asset you believe in is to buy over time. You could invest $100 today and then $10 every week after. This makes sure that you can buy some ICP at the best prices even if the price continues to fall from here. This style of purchasing small amounts over time is called Dollar-cost averaging, or DCAing. It’s a very popular strategy in bear markets like the one we are in now because it means you can buy assets without having to predict the bottom. It’s impossible to know when prices have bottomed out, and statistically, most people will miss it and buy in at a higher price.
Is $100 Enough to Invest in ICP?
Yes! Any amount, even one dollar, is enough to buy ICP. Unlike traditional stocks, you are not forced to buy ICP in whole numbers, so you can buy as much as you’d like or as little as 0.01. $100 will get you 13.11 ICP, which you can then stake to get even more ICP over time. More on this later; read on! You can buy ICP in most places where crypto is traded, such as centralized exchanges like Coinbase or Binance.
Can Investing $100 in ICP Make You Wealthy?
While it is certainly possible, most investments are not going to experience the once-in-a-lifetime meteoric rise of Bitcoin. If ICP returns to all-time highs, your $100 would become $10,000. This is a substantial return! However, consider your life situation and ask whether this would be enough to consider yourself wealthy. More realistically, you should expect moderate gains if the Internet Computer does well. Gains of 2-10x are more common in crypto versus gains of 100 to 1000 times. Most wealth is achieved by investing in quality projects over time.
While it’s unlikely you can make a million dollars off a $100 investment into ICP, investing on a regular basis consistently, combined with price appreciation of ICP, can give you great returns on your investment in the long run.
Can You Lose Money on ICP?
While we would all like to make riskless investments, unfortunately, it is possible for you to lose money on ICP. Though the price of ICP is far off its all-time highs, it’s still possible for it to fall further. If this does happen, your investment will be worth less than it was when you bought it, losing you money if you choose to sell it. For example, if ICP fell back to its all-time low of $6.11, your $100 investment today would be worth about $80. It’s possible for it to go back to this low and even further. This is why it’s always wise advice to only invest what you can afford to lose. Additionally, it’s important to try not to sell at a loss because most investments go down before they go up. Many people sold Bitcoin at a loss below $20,000 in 2018, only for it to be worth three times that years later!
How Can a Beginner Invest in ICP?
Exchanges make it very easy for even beginners to invest in the Internet Computer. Your favorite cryptocurrency exchanges most likely support and allow you to purchase ICP. Some popular ones that enable you to purchase ICP are:
- …And many more!
Using these exchanges, you can connect your bank account or credit card to purchase crypto. If you already have some crypto, you can also deposit those assets and exchange them into ICP if you’d like.
So now - Should You Buy ICP Today?
This depends on what your goals for investing are. If you are investing in the hopes of making money quickly, you may want to reconsider your goals, as quick money is usually tricky to come by yet very easy to lose. If you are looking to invest for the distant future, perhaps months or years, ICP can be a great asset to purchase today as part of a balanced portfolio. ICP is a great investment into a network full of activity, which is being further built and acquiring new users daily, such as yourself!
If you’re looking to participate on the network and in “decentralized finance,” defi for short, ICP would also be a great purchase. With ICP, you can participate in the network by using dApps such as Infinity Swap, which lets you trade various crypto assets, or Distrikt, a social media app built on the Internet Computer.
What should I do with my ICP once I buy it? What is staking?
Once you buy your ICP, you could simply do nothing with it and just hold it. This way, you could benefit from future price appreciation. However, if you’re a more tech-savvy user, you can withdraw your ICP to Network Nervous System (NNS) and Stake. Also you vote on governance proposals to improve the network. In doing so, you can get more ICP for free! This can bring your average cost down even further.
Investing in ICP could be a great move right now. While the crypto market and markets around the world are weak right now, it also presents an excellent opportunity to invest in the future. While your $100 ICP investment won’t be worth $200 tomorrow, further down the line, it could be worth even more than that. In order to determine if ICP is the right investment for you, take care to do your own research and see if you like the fundamental aspects of the project.
ICP is a token with a great network and an incredibly active community. By investing in ICP, you join a vast group of like-minded individuals who want to power the future of finance and web3 as a whole. Whether you’re a prominent investor or just want to invest a small amount, there’s room for growth via ICP.
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*Disclaimer: Note that cryptocurrencies can be volatile and speculation should not be construed as financial advice in any capacity. All opinions of the author are their own and do not necessarily reflect the opinions or position of InfinitySwap or its staff.