What is IPO (Initial Public Offering)?
An IPO is defined as a private company or organization raising investment capital by offering its stock to the public for the first time. Companies in search of capital for growth, large privately owned companies or publicly traded commercial companies apply the IPO method. Judging by the requirements for the IPO process, it is necessary to contact brokerage firms. Following the contact with the Capital Markets Board, the company information will be examined by Borsa İstanbul and Capital Markets Board experts. With the approval of eligibility, the public offering process actually begins.
What is ICO (Initial Coin Offering)?
ICO is an abbreviation of the English group of words Initial Coin Offering. It is similar to the Initial Public Offering (IPO) in traditional markets. An ICO is a fundraising tool for a blockchain project. In this process, projects issue tokens, sell them and obtain financing for their projects. Investors also buy these tokens in the first phase of the project with the expectation that they will be valued.
So what is a token? In order to better understand the definitions of IPO & ICO, you need to know what a token is and what it does.
If you think of the ICO as a company, it is as if you have bought a share in a crypto money that has not yet become a coin. ICO trading takes place with cryptocurrencies such as Bitcoin and Ethereum. Since 2013, ICOs have often been used to fund the development of new cryptocurrencies. With the success of Ethereum, ICO is increasingly being used to fund the development of a crypto project through the release of a token that is somehow integrated into the project. With this turn, ICO has become a tool that can revolutionize not only the currency, but also the entire financial system. The ICO token could be tomorrow’s securities and shares.
What are the Differences Between IPO and ICO?
With the introduction of crypto coins into our lives and gaining popularity in a short time, a new investment option has emerged. The Turkish equivalent of this investment option, which is ICO, or Initial Coin Offering, is ‘Initial Token Offering’. Thus, an important crossroads was formed in the face of those who wanted to invest; initial token offering with traditional public offering. IPO is a method mostly used by well-established companies that have been in the market for many years. ICO, on the other hand, is usually an investment opportunity initiated by young entrepreneurs and has a higher risk. No matter which investment option you choose, basically your goal is the same; grow your business and make more money.
