ICOs allow startups to bypass the traditional capital-raising process, such as venture capital or public offerings, and directly connect with potential investors.
ICOs gained popularity in 2017, with many startups raising millions of dollars in a short period of time through this method.
In response, some countries have implemented regulations to protect investors, such as requiring ICO issuers to register with regulatory authorities and disclose certain information to investors.
ICOs can offer investors the potential for high returns on investment, but they also carry a high degree of risk due to the volatility of the cryptocurrency market and the lack of regulatory protections.
Investors should conduct thorough research on the ICO project and team before investing and be aware of the potential for fraud and scams.