A Legend in it’s own time?
We have all heard about the legendary gains fueling the ICO craze, but what about when it doesn’t go quite so smooth?
Investors from every square inch of the globe have been stampeding to get in on the hottest new ICO in hopes of getting that 10x return.
This has led to some ICOs selling out in minutes and raising staggering amounts of cash.
Tsunami of New Projects
This new paradigm changing way to raise startup capital has been the driving force behind a flood of new ICOs that has been unfolding, at an epic pace, leading to lots of competition among literally thousands of new ICOs.
These new projects compete for the precious investor seed funding lifeblood that makes the difference between a billion dollar unicorn market cap, or being listed on deadcoins.com
There are now startups created solely to advise and guide other startups through the ICO process, in an effort to ensure a successful rocketship launch.
This has also led to a phenomenon of earlier and earlier presales, with larger and larger discounts, in order to try to entice investors.
Dissecting the ICO
The typical ICO goes through a layered fundraising process.
- The Private Sale – Takes place by invitation only, and usually consists of
- Strategic partners who bring something more than money to the table
- Institutional investors who spend huge sums of money buying for funds
- Any other special circumstances investors, i.e. celebrities, friends & family of the team, etc.
- Offers the largest discount or bonuses on token sales
- The Presale – Takes place before the ICO and is usually promoted by highlighting discounts/bonuses on token sales, paid ads, telegram groups, etc. These are the ads that show up in your social media feeds
- Finally, last but not least, the world famous ICO. The ICO usually lasts a month and begins upon the completion of the presale, usually no discounts/bonuses are offered because that’s usually the incentive for getting people to participate in the presale. The ICO participants can rest assured knowing they will get it cheaper (they hope) than the non participants who will be buying the token on the cryptocurrency trading exchanges once it has begun to be sold off by the ICO participants.
Due to the pyramid style pricing structure of the discounts/bonuses of the private, presale, ICO rounds of the fundraising, this has been a key point of criticism from naysayers.
Have They Killed The Golden Goose?
The last 12 months were a time in which fortunes were made and lost, and some people had life changing results which lit the internet on fire. The ICO craze has achieved a point of success that has made the world take notice.
Some argue it has reached the point of absurdity with millions being thrown at useless tokens, with no future, outright cash grabs, and scam tokens while at the same time several public debacles have occurred as well. Meanwhile the Politicians and regulators look on, hoping the industry will police itself before they have to step in.
These conditions have changed the game drastically, and the investors who have been burned once or twice are now a lot wiser, and discerning. This has led to a high rate of failure in ICOs that has been compared to the dotcom bubble ad infinitum.
Dare I Say It?
I may be one of the first people to actually publish what the market has been demonstrating, and it may upset some people.
Are the new discounts on ICOs not to be had in the presale anymore, but after the launch has failed and the bagholders dump a flood of “Cheaper than Presale” tokens on the exchanges?
I don’t want to point any fingers or name any names but there are several recent examples, out there for anyone willing to do a quick google search. The new paradigm in ICOs may be bargain basement prices on tokens, until the project proves itself.