Too Many ICO's getting successful funding for no apparent reason.
We are in a ICO Bubble!
A lot of Great projects last year raised very little money in ICO's. To Put things into perspective, Let's Look at these Numbers:
- NXT raised Only 21 BTC (valued around $6000 then)
- Stratis Launched for a mere $0.007 per token
- Golem ico offered it for 1 cent per token!
These were all hugely undervalued and made Investors at Ton of money.
The Effect?
People are throwing their money at ICO's right now without even reading their whitepaper, goal or running a simply check on the team (a lot of teams are anonymous).
These Greedy ICO's are grabbing whatever they can with NO proven product at hand. In short, they are banking off the success of the Last year ICO's like Stratis.
The Result?
New ICO's will never make the investors rich. Forget about 1000x returns (as is the case for stratis) or even 55x Returns (with Golem). Except If you have some amazing Tech and an Undervalued ICO which looks unlikely.
- New ICO coins like Bancor are trading at ICO value (Sometimes even below it)
- ICO's like TEZOS will launch the Tokens are 4 months of the ICO - Yes I am Serious.
Companies offering ICO's will need money to pay for development, expenses (and their Lambos!), But ETH will not be sufficient for that. They will need to sell their ETH / BTC.
Big Dumps of ETH are bound to happen sooner or later. The Result? Crash in prices.
What Should You Do?
- Be very careful while investing in ICOs.
- Research the Team, Mission statement, Real world usage of the Tokens before investing.
- Do no Buy based on Hype. Dont be a part of a "SHEEPLE"
- Decent returns (5x-50x) is still possible with a mid-long term view, if the Tech is great money will follow.
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Very good advice. All that glitters is not gold..........it is easy to get caught up in an ICO frenzy hoping to make a quick profit. Caveat Emptor - let the buyer beware!!
Great advise ! I wrote a post about my own view on the whole bubble thing. My point is very simple, if each one of us do not make their part, we can ruin the party. If we get enough bad examples out on the street we'll sure piss off a bunch of regulators and traditional investors, and that will likely limit the whole of crypto and blockchain economy's growth. Also, don't miss out on the CFA Institute's view on the ICO Bubble.