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Crypto presale and its importance to projects and traders

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By Jessy Sloan - - 5 Mins Read
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One of the terms many beginners are confused about in the crypto industry is presale.

Crypto presale projects are often seen as anomalies, moving away from the usual method of buying already established cryptocurrencies from the market.

Nevertheless, they are a vital part of the crypto industry and provide an avenue for investors and developers to benefit simultaneously.

On one hand, investors get an early opportunity to invest in a token. On the other hand, developers stand the chance to generate all the hype, capital, and community needed for a token's successful launch.

Hang on. Let's explore the meaning of crypto presales, their benefits and risks, and how to get started. 

What are Crypto Presales? 

Crypto presale projects allow users to purchase crypto tokens before they become available for trading on exchanges.

During these presales, the developers of a crypto project typically sell tokens at a discounted rate before they are listed on crypto exchanges.

Crypto presales come in two types: investor-only presales and open-for-all token sales.

The investor-only presales are mainly for a particular group of investors, primarily the rich ones, with promises for profits in return for their capital. On the other hand, the open-for-all token presale is for all groups of investors. 

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Step-by-Step Process of How to Participate in Presales 

The following steps are required when participating in presales

  • Open a Crypto Exchange Account 

If you want to participate in a crypto presale, you should have an account with a crypto exchange, which can be centralized or decentralized. However, it is often recommended that you use a decentralized exchange, as it offers more freedom and no third party.

  • Keep your Wallet Ready 

Once you have an account with a crypto exchange, it is time to keep a wallet ready, which can be a cold or hot wallet. Examples of cold wallets are Ledger and Nano, while hot wallets include MetaMask and Trust Wallet.

  • Keep Track of the Presale Opening 

The team behind the crypto project usually announces when the presale opens and closes. It is vital to keep track of what is happening, as the tokens can be sold out within hours or days, depending on the demand for them.

  • Conversion 

Once the presale is open, you can contribute ETH or USDT to receive the tokens. Once you have enough ETH or USDT, you can connect your wallet to the presale dashboard and proceed to purchase the tokens.

Also read: If You Store Your Crypto Like This, You're Doing It Wrong!

Benefits of Crypto Presale 

Entering into crypto presales offers the main advantage of enabling users or crypto enthusiasts to purchase tokens or assets at a discounted price.

This provides an opportunity for crypto users to secure a better deal on the asset, potentially leading to substantial increases in value, as they are given a direct share of the total supply.

The situation improves further when the token is eventually listed on popular centralized exchanges such as Binance, Coinbase, and KuCoin.

A token presale platform could also decide to give early participants presale rewards or incentives. In some cases, those who participated in the token presale are given special attention regarding governance issues.

On the part of the developers and team members, a token presale is when they get massive attention from the public. If the presto should go well, they could end up with a gigantic organic community and following.

Risks of Crypto Presale 

One of the major things investors should know about crypto presales is that they are investing in something new and unproven.

In other words, contrary to the usual expectations of making profits, the token could rapidly decrease in price after launch, leading to losses.

Moreover, even if the crypto project claims to have utility, it has not been tested against already established competitors in the market. 

Remember that cybercriminals often exploit vulnerabilities during crypto presales.

Simple mistakes like clicking on the wrong link can lead to large-scale phishing attacks, resulting in malicious actors draining all your wallets.

Therefore, it's crucial to stay vigilant and avoid cybersecurity errors during crypto presales. If possible, refrain from using a crypto wallet that contains your other cryptocurrencies for a presale.