Friday, March 2, 2018

46% of 2017 ICOs have already failed, Yours is next

Interesting piece for your reading consumption.

I'd say the #1 misconception now by intermediate crypto players is the thinking that you "need to do more ICOs to juice up your returns, especially in a sideways / bear market".

Meh.

Won't say I fully disagree, but I don't think that is very accurate, or else I would be doing that strategy as well.

However, I must say that crypto ICOs are extremely skewed with risk and rewards. For some people, going for obscure ICOs and hunting down low cap cryptos - AFTER FILTERING AND ANALYSIS - can prove to be an extremely profitable strategy.

Then again, this strategy only works with limited value since you don't want to end up being the only person driving up the price and volume. How can you exit a huge position if the daily trading volume is less than your holdings?

^ This is something that A LOT of people just don't understand. Market freaking depth. Just because the price is $X, that does not mean that you can sell out your position at $X. A lot of people sorely misunderstand this, and that'd be the death of them when they are stuck in dying positions with drying liquidity.

Anyway, a lot of people seem to have forgotten the 1st ICO purge of 2017. If I'm not wrong, the turning point ICO was Monetha, which had massive FOMO and sold out within a few blocks. A few weeks later? Losses.

This was the time when Binance was considered the "ICO Graveyard", where shitty projects that fail to get Bittrex listings would pony up 5 BTCs and pay for a Binance listing in hopes of placating the token investors constant stream of "when exchange?".

Fast forward back to today, the number of hot steamy shitty ICOs streaming off the conveyor belt is alarming to me. A lot of the crypto uneducated are falling for all these "early bird bonuses".

If everyone gets bonus +100% tokens, do you really get bonus tokens?

Another risk that I would like to highlight is "pooling" with strangers. Pooling is now getting common since a lot of ICOs have huge investor's interest and they are skipping a lot of work by instead offering $1m to 1 VC / pool / whale instead of $1000 to 1,000 people. It is now getting increasingly harder to get a decent amount of allocation unless you qualify for pre-sales (which usually includes a MINIMUM) or if you join a pool.

Doing ICOs is already risky - risk that the team is a scam, risk that the project just sucks, risk of scammers pretending to be the team (MITM attack).

Adding a pool on top of this increases your attack vectors drastically - risk that the pool master runs away with your money, risk that the pool master does not accurately give you tokens, risk that the pool master himself falls for a scam, risk that you yourself get scammed to sending to a fake pool.

Anyway, I'll conclude simply:

Unless you are an intermediate / advanced crypto enthusiast, I would highly recommend to AVOID doing ICOs because there are just so much risks involved and many are unable to properly mitigate such risks, so the crypto noobs fall for a lot of these traps rather easily. Scammers still keep on scamming because there are still plenty of people falling for these scams.

Even if you are an advanced player, I think it's we can admit that most ICOs are shit and that 95% of all other participants are in it to flip it.

Every single ICO that I've done, I've made money. It's not a qualification, but I think that as someone that have done a few successfully and analyzed dozens, my experience should count for at least something.

I am done with ICOs this season (Ocean Protocol whitelisting done and likely to be the last ICO that I will do for now). Next to nothing is compelling or intriguing to me. I am always on the lookout for great ideas though. But seriously, most are shit.

Of course, I'm just a crazy crypto guy, so take my ramblings however you see fit.

Stay safe.

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