Altcoin ICOs (Initial Coin Offerings) are really another form of crowdfunding where investors are given the opportunity to purchase part of an altcoin’s premined coin supply before the mining process begins. These premined altcoins are usually purchased on an exchange before the market goes live. Once the market goes live, the altcoins can be traded just like any other cryptocurrency on the exchange.
Before investing in an altcoin ICO, do your due diligence. Do the developers have a positive history in the crypto community? Do they respond to emails, PMs, social media contacts, etc…? Don’t be shy about contacting the altcoin developers and asking questions. After all, you’re trusting them with your hard earned bitcoin :)