The cryptocurrency world is booming right now, and this year, the growth in value of major cryptocurrencies have turned heads of the most disbelievers to it, with BitCoin approaching $10,000, and ETH rising to $480 and above. Many early adopters have become millionaires already, and many are hoping to follow that path.
But the major coins have grown in price now, and the early adopters chance is lost for many people. ICOs, short for Initial Coin Offering. Where a company runs crowdfunding campaign, raising millions of dollars, in exchange for a sum of the new cryptocurrency that will be distributed and used throughout the new system.
The company raises funding, without much legal guarantee to the investors. Investors in return seek to win a good sum of the new crypto coin at an early low price, and then sell at profit once the value of these coins go high.
With proper research upfront, I've tried my luck with three ICOs this year, namely SONM, EnjinCoin, and Unikoin Gold. And while all seemed promising at the time, and none have proven a failure yet. In fact some are still promising, and I could still make profit on my investment. Every ICO I have invested in, have seen the value of the coin after distribution dropping below original ICO value, sometimes by as much as half!
With that in mind, I am wondering why would one put his faith, money, and take a leap of faith in an ICO, with so little return. If he can instead wait to see how the company performs, and then buys soon after the new coins hit exchanges at an even lower rate. Meanwhile, he could put his money and invest it in other coins, rather than freeze all his assets.
To me, have I kept my money in ETH or BTC during that time, I would have made enormous profits. Instead, I froze the assets in an ICO, seen the value of my investment go down and others grabbing the same coins at half the price, hoping to see profits in the far future.
Conclusion: Unless an ICO is extremely of unique value, that coins are likely to be sparse after initial distribution, you're most likely better off waiting to see how things unfold, and meanwhile invest your money in existing coins.
I'm wondering. What was your experience with ICOs however?