ICO mania: unless you are getting an awesome deal, you are being a dumb ass buying into ICOs

Everybody and their grandma are having ICOs these days. It feels like a bunch of high tech, multi-million dollar bake sales for the next crypto-charities. Some of these ICOs are so outrageous it beggars belief. Most have no decent business plan, nothing concrete to sell, no experience in the market they want to enter, nothing, nada, niente. They all have one thing in common though, they are based on blockchain..so buy! buy! buy!

Nobody will just release a coin anymore; and why should they if there are enough dumb asses to give them crazy sums of their money for ridiculous half-baked business models? Not only that, these ICOs are completely f'n the crypto markets. After these ICOs get their millions (typically in Ethereum these days), they have to dump this on the market to get the money they want for their projects, some advertising, the post-ICO parties, a new car with their coin logo and website on it, etc.

Now all the newbies on Steemit are wondering why the Ethereum price is dropping so much. Well, no shit Sherlock, it doesn't take a Holmes to figure this one out. If all these ICOs are dumping their Ethereum for cash for a marketing / post-ICO party trip to Singapore for the next blockchain conference, then who's buying? After all these multi-million ICOs start cashing out, you can be sure the crypto-market is going to keep dropping for a while to come.

Some simple ICO rules to live by

1)) Unless the ICO is giving you an awesome deal don't buy in

You are taking a risk with your money entering this ICOs. It's not just sunshine and lollipops. They should reward you significantly for taking this risk. If not, wait to buy later. Take the latest TENX (TENTHX) example. The initial trading after the ICO was on very small exchanges and stayed high because there was no volume (simple supply and demand economics). Then when it went to Bittrex it dropped like a stone to less than a tenth of what it was on the small exchanges. You could then buy it for less than the guys did in the ICO. There are loads of cases like this. So what's the point of buying and taking this risk unless you are getting a kick ass deal?

Sure there are serious traders that will still make money off the quick pump and dump in these ICOs and if you know what you are doing and can be ready to get in and get out fast, you can still make a lot of money in these situations. However, for the average Joe, just avoid this shit altogether. It's not worth it unless you get a great deal that helps to protect you from such situations. A great ICO deal is when they give you a 50% bonus in the first day or they give you special premium coins that are only available in the ICO that give you a stake of the ongoing profits. These types of deals make an ICO definitely worthwhile assuming all the other ICO fundamentals are solid as well. (I won't go into ICO fundamentals here because there are too many articles on them already that you can check out.)

2)) Unless it's a small number of coins, don't buy in

If you are entering an ICO with 10 billion coins, simple supply and demand dictates that these suckers are going to drop like lead balloons when they hit a real market. Sure they may eventually go up as they develop a real business case over time, but to start with you just can't win with this massive supply price effect. If the coin only has a couple of million or even less, you have a great chance (assuming all the fundamentals are there) that the coin will be hoarded by a select community and the price will then stay up because they are not dumping their coins on the market.

An alternative scenario is that the coins are never put on a major exchange and the team only slowly leaks the coins out. This is the case with Veritaseum. Frankly, Veritaseum is totally overpriced for what it is and what it has to offer at the moment, but the coin has been hoarded by almost religious speculators, the coin has not gone onto any large exchange that would require sufficient volume availability, and the team running it has kept the volume very much under control. This has led to a very high price for a coin with currently nothing to show for it except Reggie Middleton's investment reports.

Don't get caught up in the hype

The ICOs are mostly all hype at the moment with no good fundamentals. Sure there are some real gems out there, but then you need to do your homework and dig through the shit to find them. My recommendation is just to leave them alone unless there's a great deal on the table for you. Otherwise, you're just paying for someone else to blow your money for you.

If you like the content here then please upvote, resteam, check out all the other great content on my blog, and follow me @newsandviews