I remember a few years ago some of the guys I know (who are major investors, by the way) did not take bitcoins seriously. Now it quite a fun to see them asking me for advice whether it is time to get started in cryptocurrency. Indeed, to get in at the peak is risky so most people are focusing attention on a new milestone in the cryptoeconomics – ICO.
ICO is an initial token offering, which popularity is sky rocketing: the market has grown over USD 1,500,000,000 – you can see the request increase below. At the same time, there are not so many adequate regulations or legal jurisdictions in this area.
So why are ICOs so attractive for investment? Statistically, 80% of ICOs grow 2-fold or more, which makes them uniquely profitable tools for investors, as well as an effective way to attract investments for online projects (just remember the BAT project, which raised USD 35 million in just 300 seconds). And I do not even want to comment on hundreds of new dollar millionaires, who have made a fortune out of nothing. The cold statistics do not lie: this is the new gold rush.
However, I will not preach morality as everyone is free to choose. Just look at the summary table of ICO profitability and try not to be surprised.
To make things clear: the first indicator is almost 650,000% ROI, the second is more than 160,000%, and the third is above 106,000% (according to icostats.com on September 8th at 02:16).
All we can do is to envy those lucky guys, who bought NXT at the right time (like me:):
NEO – one of the most profitable ICO that demonstrated growth by 91,781%.
Is it that simple?
As there are no established regulations addressing ICO, hundreds of weak, non-profitable and even scam projects appear on the cryptocurrency market. To get in a successful ICO, to multiply your funds by hundreds of percent and not to lose it all, you either have to invest your time in studying the cryptoeconomics or should listen to reputable experts. Investment by chance is not going to work here.
To understand that the scam phenomenon is not new just add a dot and com, and http://scam.com will show you hundreds results on the subject. This is not surprising as people tend to make mistakes meaning there will always be those who will turn their mistakes into business.
Before you jump the gun take note of the existing scam projects:
- nodio.net — 2016, Ukraine; the website is down.
- www.ebitz.org — 2016, Anonymous; the website works just formally.
- www.tithecoin.com — 2016, USA; the website works.
- ascendancy.io — 2016, Not found; the website is down.
How to avoid scam? It is easy indeed. You do not need super methods, machine learning or big data processing (though it would be definitely helpful). What you really need is diligence, attention to details, and a huge amount of time to spend on analyzing ICO projects. Have no time or desire to do it? Either do not get in the projects at all or consider at least ICO-news – these guys do their best.
If we talk about the most relevant projects at the moment (27 April), then there are not so many ongoing. You should be really careful, as in my opinion, most of the projects that are currently on the stage of selling the tokens, either were originally conceived as a scam, or will definitely become scammed in the next year. Most experts (including me) clearly agree that B2Bx will be successful. There are heated debates on the profile Internet resources around the rest of the projects, or completely silence about some of them. And this and that is a bad sign. So if you still decided to make it to the last car called “I managed to get rich on the ICO” then I advise you not to lose your head and start with the project I mentioned earlier (link left above), and carefully study the key points in the future:
- The team
- The technology
- The concept
- The legal status of tokens (very important)
If you do not have sufficient competence to carefully study each of these indicators, then do not waste time and do not risk – trust experts.
Can it be too late?
The statistics is astonishing: according to CoinDesk, ICOs has attracted about USD 1.5 billion compared to USD 101 million in 2016 (15-fold growth). According to Smith&Crown, when the tokens increased in value they grew 28 times on average. For example, the tokens of the Voise music platform went up 453 times from June to September 2017; Etheroll coins went up from USD 0.06 to USD 165.
The authorities cannot miss out on that much money and, naturally, many states think about methods to regulate the crypto space.
As a result, the cryptocurrency market is facing significant changes now.
Banning the existing coins would be useless (just remember the ban of anonymous centralized systems in 2013. Now look at the bitcoin diagram, and everything will make sense). The coins raise in value right at the startup. The startup requires ICO. And it is totally up to the governments to ban ICOs.
A short while ago bitcoin was declared illegal in China. And now the U.S. Securities and Exchange Commission (SEC) is about to gain control over the cryptocurrency at the earliest possible opportunity. Furthermore, governments of many countries consider a total ban of tokens emission and other sophisticated methods to fight the upcoming ICOs.
Whether you like it or not, “it can be too late” quite soon. And if you are still thinking whether to enter the crypto space or not – my advice is not to delay with your decision.