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They say that everyone has at least one brilliant idea; it’s just that most people never do anything with it. It’s one thing to have a eureka moment, but implementing it requires time, effort, and capital. Thanks to the advent of ICOs, at least one of those problems has now been solved. Almost half of this year’s crypto projects launched their ICO with little more than a white paper and an idea.
Crowdfund First, Code Later
It’s no secret that many ICOs launch without an MVP in place, or that many have simply hired a developer to create the smart contract for their token. Recruiting developers and writing code costs money after all, and money’s hard to come without an ICO, hence the eagerness to crowdfund first and code later. New research by ICO Rating shows the prevalence of this trend among crypto projects. Their market research report reveals that 46% of the ICOs that launched in Q1 of 2018 did so with zero development.
Just 26% had an MVP in place, and 15.5% had an alpha release ready at the time of their ICO. It’s become commonplace for projects, especially those working on blockchain infrastructure, to launch with just a roadmap and whitepaper as an ERC20 token before initiating a token swap once their mainnet is ready several months down the line. The difficulty for investors, trying to scrutinize these projects, is that they must trust the claims of throughput and other performance-based metrics, since there is no way of verifying them.
Investors See Diminishing Returns
ICO Rating’s Q1 data also shows that the median return on tokens has fallen more than 10% compared to Q4 of 2017, and now sits at 49%. In addition, only 21% of this year’s tokens have been listed on exchanges so far, versus 33% for the previous period. Perhaps the most telling statistic that demonstrates the difficulty investors have had in turning a profit is the fact that 83% of tokens listed in Q1 traded below their ICO price.
Data shows the sectors where crypto funds are invested
A final finding of interest from ICO Rating concerns crypto funds. These have proliferated over the past 18 months, with a string of major investors from the worlds of VC and traditional finance entering the space. These funds tend to enter the market with great fanfare, but have a tendency to leave with a whimper. ICO Rating notes that only 119 of the 219 crypto funds it analyzed are actively operating, and nine funds closed in the first quarter of this year including Crowd Crypto Fund and Alpha Protocol.
They opine: “We expect that more funds may be closed in the future, due either to inefficiency or legal problems with regulators.” Nevertheless, with the remaining funds overseeing almost $28 billion in assets, crypto funds are big business.
What’s your opinion of ICOs that launch without any code or an MVP? Let us know in the comments section below.
The interim corrections at Bitcoin does not scare the optimist: There will be "mass adoption" and education of the people. Starting off at a mere 8cents, Bitcoin has risen by to currently $14,000. Shareholders of the initial Bitcoin offering have gained an explosive return on their initial investment in less than 5 years. This paved the way for early adopters to make very good returns at a fraction of let's say the share price of a stock on the stock market. And the benefits far out ways the traditional way we invested in Shares.
In 2018 I see the trend that companies are selling shares as "Initial Coin Offerings" or ICO.
The simplest way to understand an ICO is that it consists of crowdfunding on top of a blockchain (the technology behind Bitcoin). Investors buy tokens -- units of digital currency -- which are typically meant to be an integral part of the application that the startup wants to build. The bet is that the application will be popular and thereby generate demand for the tokens, increasing their value.
The drive to discover alternate ways for a new company to raise money has birthed many experiments, but none more prominent than the 2017 rise of these Initial Coin Offerings. Investing in a digital currency is extremely high-risk — more so than traditional startup investing — but is motivated largely by the explosive growth in the potential future value with very low starting prices. More often than not, these ICO's or tokens gain value as they are very cheap to acquire in the pre-Launch stages. An ICO typically involves selling a new digital currency at a discount — or a “token” — as part of a way for a company to raise money. If that cryptocurrency succeeds and appreciates in value — often based on speculation, just as stocks do in the public market — the investor has made a profit. Buyers during the presale period personally conduct a transaction. Later on, a purchaser can use a website portal, that requires an identity check and then after the pre-sale, these alternative coins gain momentum and gets listed on International exchanges. This is usually where the coin gains traction and mass investment, pushing prices higher and paying off the initial investor.
So far, most ICOs are built on top of Ethereum, which is like a version of Bitcoin that can also host applications called "smart contracts."One such a coin That is a South African Based ICO is worth looking into at pre-launch prices. Bitrand or BTR is one such ICO that is bound to take the South African market by storm. Insiders are extremely secretive about the proposed applications and at the time of this writing we were unable to get any substantial information as to when this ICO will be released for pre-sale and who the role-players will be. We will be keeping a close eye on that one..
As mentioned before, my prediction is that 2018 will win less Bitcoin and Bitcoin shares, but quite a few new ICO's - the "new generation of Blockchain". If 2018 is the year of the Bitcoin alternatives, then new small caps should be worthwhile looking into. Here are our favourites:
* BTR - Bitrand No Information available as yet. Watch this space.
* NXT Current Target = $1,34
* Ripple
Current Target = $2,61
* IOTA
Current Target = $3,84
* Dogecoin
Current Target = $0,84
SUGGESTED - SAVETY ZONES
1. Bitcoin
Current Target = $12 807,50
2. Ethereum
Current Target = $709,01
3. Bitcoin Cash
Current Target = $2 414,17
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Disclaimer
Please be advised that we are not a financial institution and we are publishing trading ideas and speculative information. Any investments in any form of financial product is done completely at the reader's own risk and we cannot be held liable for any financial decisions taken by our readers. As with all high-return investments, buying cryptocurrency is risky, and ICOs are riskier still. All data and information is provided “as is” for personal informational purposes only, and is not intended for trading purposes or advice. Please consult your broker or financial representative to verify pricing before executing any trade. As with all active investments in general, it is wise to never commit more money than you can afford to lose.
It’s no secret that many ICOs launch without an MVP in place, or that many have simply hired a developer to create the smart contract for their token. Recruiting developers and writing code costs money after all, and money’s hard to come without an ICO, hence the eagerness to crowdfund first and code later. New research by ICO Rating shows the prevalence of this trend among crypto projects. Their market research report reveals that 46% of the ICOs that launched in Q1 of 2018 did so with zero development.
Just 26% had an MVP in place, and 15.5% had an alpha release ready at the time of their ICO. It’s become commonplace for projects, especially those working on blockchain infrastructure, to launch with just a roadmap and whitepaper as an ERC20 token before initiating a token swap once their mainnet is ready several months down the line. The difficulty for investors, trying to scrutinize these projects, is that they must trust the claims of throughput and other performance-based metrics, since there is no way of verifying them.
