ICO Investments Why Risky?

[BitcoinTurk]

ICO projects have entered our lives with an incredible pace last year. People who follow the market very closely through these projects have very serious boilers and users who do not follow the market too could only hear information about projects. This investment sector, which saw a significant increase in the last year, managed to earn significant investments in the first quarter of this year, but unfortunately such investments cannot offer as much guarantee as before and cannot provide as much profit as before. Everyone can clearly see the end of the era of being rich by investing in ICO. And what risks does this investment vehicle have? Why is it not so favorable or favored by many investors today? Have you ever wondered the answer to these questions? In this article, I will tell you the answers and the reasons for all these questions.

Virtual Product

Virtual products are the first to be trusted or unreliable in ICO projects. The point to be mentioned with the virtual product word here is the expectation of profit margin return with the sale of a real and non-existent product. A token (product), which is not yet in the market, is sold to investors with a certain value. The investor thinks that when he buys these tokens, he will sell them with certain values and in some projects, he cannot go beyond imagination from some projects. In short, we are paid for a product that does not have any value yet and we think that we will sell it more profitably in the future. In this case, successful projects do not take place in some projects or completely explode in the hands of the investor.

Fancy Dreams

It is another risk factor related to the topic mentioned in a higher title. Once the project team has set a price for its product, it also tells its investors the price to sell. It is wrong to make such a clear value estimate for a product that is not yet completed or a product that has not yet been completed. As a result, each project will be successful and reach the target price and it can pass the price is not a rule. For example, let's say we get 10,000 X-Tokens for 1 ETH. The project team is going to sell this imaginary by stating that the value of these 10,000 X-Tokens will be 3 ETH. Then, we start to dream with this money. The big day is coming, and without any mishap the project is achieving success. In this case, the dreams sold to us become reality and we are doubling our money (who knows, maybe more?). But in case the project is not successful, our money is either decreasing or completely disappearing. In this case, the dreams sold to us are frustrated and have no value. This is why ICO projects sell us a dream when they actually offer investment opportunities.

Discenterless Management

The fact that many ICO projects have decentralized management is another risk factor. Since there is no center, the product to be produced or the imagination sold to us is open to many speculations. For this reason, our investments can be seriously valued with severe changes and serious losses may be experienced. It is important to note that this risk factor is present in many types of cryptocurrencies.

Law

Undoubtedly, I think many people know or predict this risk factor. In the crypto money market, unfortunately, there is no formal rule-of-law or formal legal framework (although not a few states try to take measures). Because this is not a legal framework or a rule framework, the investments in such imaginary products can be very risky for this reason. Of course, high risk means high earnings, but you are not able to do any legal action when you are defrauded in your investments. It is for this reason that many litter projects have recently made ICO and have made serious gains by making big picks.

Risk

Another risk factor that can be linked with an upper substance is trust. Since there is no legal regulation in this market, we can face many trust shortages when investing. Therefore, doing a detailed research on the members of the project team before making an investment will help us achieve a very useful result. With this research, the problem of trust will be solved and at least one risk factor will be reduced.

What is the biggest risk factor that makes you feel uneasy when investing in ICO? I am waiting for your answers with your explanations short or long.

[carter34]

Among the factors discussed, I pick law to be very important  and relating to the topic . Law comes first above the last factor which is risk. Risk is talking about trust and trusting the team or project but I don't even need to trust when I can legally make the team pay for their omission/act, conspiracy, embezzlement and fraud. I just sue them  

[omonuyak]

I have not get good luck in investing into icos and the few one that I have invested is not doing very well in the market.  Icos investments is very risky and many investors have lose significant amounts of money.  I don't think we can really succeed the ways people and investors are losing money through icos scam projects.

[Maestro75]

The virtual product angle scare me. The fact that we can not feel or touch the products we are paying for and we can not trace most of the offices of the developers offering the ICO. Last year was great for ICO until people started scamming with it. People will continue to loose money until laws are put up to monitor ICOs. I have not been lucky with ICO because all my investment in it has be listed below the price of purchase.

[harizen]

The virtual product angle scare me. The fact that we can not feel or touch the products we are paying for and we can not trace most of the offices of the developers offering the ICO. Last year was great for ICO until people started scamming with it. People will continue to loose money until laws are put up to monitor ICOs. I have not been lucky with ICO because all my investment in it has be listed below the price of purchase.

ICO last year is no different from ICO this year. It's just that bitcoin price went to a crazy pump last year therefore all ICO's are dragged with it's hype.

That "virtual" product are present since ICO industry began. Honestly at most of the cases people are not really into the product or technology why they participate in an ICO but instead they joined because of pure hype that a decent return will come to them in the near future.

Law
..Because this is not a legal framework or a rule framework, the investments in such imaginary products can be very risky for this reason. Of course, high risk means high earnings, but you are not able to do any legal action when you are defrauded in your investments.

That's why ICO regulations become more of strictier now compare back then. Correct me if Im wrong but in U.S it's now mandatory that ICOs based there should registered in SEC? If that's the case, Im seeing that it can give comfort to the investors that they can have a legal action against the ICO once it became sh*t although Im seeing a lots of regulations that's not meant for crypto.

[green547]

It's actually not that risky if you do lots of research.  Its risky for the idiots that throw money at anything that is hyped up with lots of advertising.

[Reid]

The virtual product angle scare me. The fact that we can not feel or touch the products we are paying for and we can not trace most of the offices of the developers offering the ICO. Last year was great for ICO until people started scamming with it. People will continue to loose money until laws are put up to monitor ICOs. I have not been lucky with ICO because all my investment in it has be listed below the price of purchase.

The virtual product scares you and yet you are in bitcointalk.  

Last year was a blast. No doubt about that but that is also because of the hype that happened with major crypto currencies. Bitcoin, Ethereum, BCH and more. When I say major though, it is the most supported by people. I do not say they are all that great than bitcoin.

Now with that hype includes the price of every token that is under ERC20 of Ethereum which is also being boosted in price.
You can but like small amount of tokens for 1 Ethereum because of it. They even put "0.1" Ethereum as the minimum to buy the token.
Now, that is just $21-22 which I dont think can be a minimum for buying their tokens.  

Another key is their roadmap. Most of the early ICO have been for a year so they are almost halfway their roadmap and success could be seen already.

But now, you wont see much patience with a lot of investors. They want their money back just after the ICO! That is ridiculous. You will see who are not reading the whitepaper before investing.

[kaya11]

If only it went smoothly for the market last year maybe we have a better one today. Only the hype of BTC dragged most of the alts, it was a good opportunity to engage in ICOS until then. The day comes and boom most ICOS are being said as scam or ponzi projects and there it goes-tainted the name and some other few coins that is worth the trust. The market today is at where it supposed to be, if another big fall donw of prices then I can't imagine anymore what could happen to crypto currencies.

[BitcoinTurk]

The virtual product angle scare me. The fact that we can not feel or touch the products we are paying for and we can not trace most of the offices of the developers offering the ICO. Last year was great for ICO until people started scamming with it. People will continue to loose money until laws are put up to monitor ICOs. I have not been lucky with ICO because all my investment in it has be listed below the price of purchase.

ICO last year is no different from ICO this year. It's just that bitcoin price went to a crazy pump last year therefore all ICO's are dragged with it's hype.

That "virtual" product are present since ICO industry began. Honestly at most of the cases people are not really into the product or technology why they participate in an ICO but instead they joined because of pure hype that a decent return will come to them in the near future.

Law
..Because this is not a legal framework or a rule framework, the investments in such imaginary products can be very risky for this reason. Of course, high risk means high earnings, but you are not able to do any legal action when you are defrauded in your investments.

That's why ICO regulations become more of strictier now compare back then. Correct me if Im wrong but in U.S it's now mandatory that ICOs based there should registered in SEC? If that's the case, Im seeing that it can give comfort to the investors that they can have a legal action against the ICO once it became sh*t although Im seeing a lots of regulations that's not meant for crypto.

Yes, the US now offers certain conditions for these projects and does not allow US citizens to participate in projects that have not met these requirements. I wanted to give information in general because I did not write a article for a single country. For that reason, I wanted to express the difficulties that all the world's investors can face today in the field of law. Of course, what you write is not wrong, but if you need to comment on the United States quite accurate and important information.

[Dimon8]

Good topic. I am alarming and make myself feel uncomfortable with all the factors you listed. Today, unfortunately, most of the ICO projects are fraudulent, and I am obviously prepared to lose money when investing in projects that interest me.

[the13thsymphony]

But now, you wont see much patience with a lot of investors. They want their money back just after the ICO! That is ridiculous. You will see who are not reading the whitepaper before investing.

Because of the great time and hype that happened last year people who has the mind set that they can earn a quick buck in investing in ICOs are swarming all over the crypto space and because of that the value of deserving ICOs is dropping and with that we cannot see the project full potential. Also just so remember that the dip in prices of ICOs after the token sale is not the bounty hunters fault as they only get the smallest allocation of the token sale at their hands and it is their right if they want to sell it right away or not, so with that said it is safe to say that people who sees ICOs as a quick way to earn money is the one to blame.

[GirlBitcoin]

A long article, but I want to summarize them with a phrase, should not invest now. Simply because the market goes down, things will not go as planned by the ICO project owners. I have participated in 3 recent ICO projects, all projects are delayed and that made my portfolio worse.

[joebrook]

A long article, but I want to summarize them with a phrase, should not invest now. Simply because the market goes down, things will not go as planned by the ICO project owners. I have participated in 3 recent ICO projects, all projects are delayed and that made my portfolio worse.

I have and will always prefer to invest in cryptocurrency itself rather than an project where they start an ICO, not every ICO turn out profitably but I am sure that an investment into Bitcoin will then out some profits no matter long long it takes.

[kkaroul4]

because now there are so many ICOs that experience scam and fraud tokens, so the ICO is now a big risk if for an investment place and you also have to be careful to look for ICOs that will succeed later

[Muzika]

I can see it very risky too because there are money involved and since it was an ICO the team might run together with the money you put with them. Also in the end the ICO might failed and in return your investment is lower than what you put in.

[jademaxsuy]

Well explained but, the question is why is it still there people who are investing in an ICO project when they know that it is too risky? Better tell an ICO investors and ask this question because in this investment the law does not work and cryptocurrency has its own system which could function even without the interference of the other organizations like the government. This is the question that should be put to another thread and we will be more than happy to know more about it. 

[BD Money365]

I think ico investment risky for them who don't know how to choose a strong project,good project or real project.some people don't study about project beforr he/she invest in the project.So they don't get profit from ico investment even they will fall in loss.but some people do study about the project before he/she invest in a project,so maximum time thet earn profit from ico investment.So before invest in a project analysis is the most important to earn profit.

[kramchers]

there are so many SCAM ICO now that is why most people prefer to have a token that is in the market.
they prefer trading than investing.
there are so many investors who dont want to get involve in any ICO because of SCAMS.
this gives bad effect with some ICO. there are so many legit not who dont reach the softcap.

[DeadCoin]

Without any knowledge invest in ico is too risky, if you have thorough knowledge about ico it is not risky. Before invest just check the ico investment details such as white paper, road map, project details, team members and team manager. Just checkout how long they exist in the market. Get through the reputation they have gained. Those firm with good reputation will not mostly cheat the customers /investors. We can not avoid scam ICOs, its just we need to be so pro-active in choosing the legit ICOs.

[jhongzjhong]

Without any knowledge invest in ico is too risky, if you have thorough knowledge about ico it is not risky. Before invest just check the ico investment details such as white paper, road map, project details, team members and team manager.

Exactly mate, before investing into a project do your time spent on research if that profitable project. Having a deep depth research is your own risk to decide into your investment so much better you know everything that they have.
For me, I usually take a risk if that project managed by the manager who is reputable because I think they know everything they are afraid and careless to lose their reputation because of the scam project.