Do ICO scams drive investors to Bitcoin?

[Upgrade00]

I have been pondering the effect of scams on the cryptocurrency market. Are investors who fall victim to ICO scams more likely to move to Bitcoin or is it a case of 'once bitten twice shy' and they avoid cryptocurrency investments altogether?

From the 2nd quarter of 2018, there was a sharp drop in ICO investments, and during that period Bitcoin was deep in the bearish market which lasted all through last year and the first quarter of 2019.

The ICO market has failed to completely recover, but Bitcoin has been making surges, and still waxing strong.
This also asks the question, are we getting closer to the point where all other currencies would have fallen too far behind and  the Bitcoin network would stand more prominent and truly dominate the market? Of course, some altcoins would stand the test of time, but when we enter a dynamic phase in the cryptocurrency market, where it would be very difficult or impossible for scammy projects to spring up.

As an investor, how have you handled losses and scams in ICOs?

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[Coyster]

It has been made obvious and so glaring that ICO projects are either scam or worth little or nothing on the market, investors have gone back and forth this routine hoping to get a good one, but that seems a far cry today.

I think ICO investments have dropped drastically as it should really, who puts his or her money into what guarantees little or nothing.
ICO is more or less a game of luck, I think most investors are tired of playing the risky game.

[OmegaStarScream]

I personally think it's the opposite, especially before Facebook banning ICOs and crypto related ads. We had people who had nothing to do with crypto being exposed to ICOs that turned out to be a scam... That was giving crypto and bitcoin specifically a bad image, so If anything, this was pushing people away. As for the real bitcoin enthusiasts, I'm pretty sure they never left to start with because they know what ICOs are all about.

[mk4]

Are investors who fall victim to ICO scams more likely to move to Bitcoin or is it a case of 'once bitten twice shy' and they avoid cryptocurrency investments altogether?

Definitely a mix of both, but more of the latter I think. In the long term though, all these scam ICOs and scam cryptocurrencies just shows how only bitcoin(and probably a small number of other coins/tokens) will actually be successful and matter in the long term. Some of these people would probably fomo back in in the next bull run.

As an investor, how have you handled losses and scams in ICOs?

Never personally invested in ICOs. Not even once. And I'm proud of that.

[Upgrade00]

Never personally invested in ICOs. Not even once. And I'm proud of that.

Well there have been a handful of ICOs I am proud to have invested in.
Investing in Bitcoin, usually requires a deep pocket, and for those worth little capital, they have the option of learning day trading or taking risks with ICOs.
On the flip side some have lost big in Bitcoin due to impatience, or following the hype.

We had people who had nothing to do with crypto being exposed to ICOs that turned out to be a scam.

We also have people who raised capital through ICOs, and put that into Bitcoin.
I believe a good quality of an investor is identifying a potential crest, and riding the wave...while it lasts.

...

Fair enough, the cryptocurrency market has moved away from ICOs, and bounty projects they offer.

[DdmrDdmr]

<…> As an investor, how have you handled losses and scams in ICOs?

I gave ICOs a go, and participated in a few (even having to get up around 3AM to participate on one or two occasions, which at the time had its thrill). Out of the ICOs I participated in, perhaps one has a shot of turning into a sustainable project. The others were clear exist scams or projects that are currently alive, but really lying low both in terms of production and expectations.

Of course, one knew that even if you tried to cross-reference information, it was still a game of odds and a wild bet that the ICO would eventually get anywhere. In the aftermaths, it would have been better to avoid ICOs on the whole. That would probably apply to the dot com era too, but some did push through and their shares (not tokens) are worth a pretty penny now.

If I were to pump more savings into crypto now, it would likely be solely into BTC, or at most a select few alternatives.

[bitmover]

I personally think it's the opposite, especially before Facebook banning ICOs and crypto related ads. We had people who had nothing to do with crypto being exposed to ICOs that turned out to be a scam... That was giving crypto and bitcoin specifically a bad image, so If anything, this was pushing people away. As for the real bitcoin enthusiasts, I'm pretty sure they never left to start with because they know what ICOs are all about.

I think it may drive many people away from btc as you said... especially beginners.

However some more experienced users may be driven away from any altcoin and focus on  btc exclusively. THats what happened to me.

As I saw many scam coins out there, I realized that the only one that I know is not a scam is btc.

[mk4]

Investing in Bitcoin, usually requires a deep pocket, and for those worth little capital, they have the option of learning day trading or taking risks with ICOs.

You. don't. need. to. buy. one. full. bitcoin. If you want to invest in bitcoin for the long term, you don't necessarily need to go in on one go. You can simply dollar cost average weekly or monthly, to slowly but surely get your bitcoin stack up.

[serjent05]

Often times uninformed investors thinks that the cryptocurrency they are investing has something to do with Bitcoin.  So whenever they invest in a scam ICO they also stay away from Bitcoin thinking that they are the same.  Same goes with those ponzi scheme company that taking advantage of ICO craze way back 2018.  Lots of investors on those ponzi scam thinks that Bitcoin is also scam.

As an investor, how have you handled losses and scams in ICOs?

I always do my own research, looking at the roadmap and reading whitepapers on how they will attain them.  Though I admit, even if we do our assigments in researching about ICO, the losses can't be avoided because we do not know what will happen in the market when the ICO launches.  If ever the project is very legit and promising and the value of their token goes down, I simply buy more to average my losses.  And if ever I see that there is no hope for the proect, I'll just scratch my head and learn from that mistake.

[pooya87]

investors never migrated to ICOs to want to come back to bitcoin. ICOs and in most cases altcoins have always been the temporary tool that traders used to increase their bitcoin wealth. ICOs being the more risky and be more like a bet, became popular due to the large scale hype and the pumps that happened in some cases that had the potential of a big return on their investments. otherwise investors have always been in bitcoin.

[Pmalek]

The problem is that people are searching for the next Bitcoin in all these ICOs. Especially new crypto currency users think that they missed out on the big Bitcoin wave in 2017 and now it is the time to catch a new one in one of these projects.

That is very unlikely to happen. As previously stated many of the ICOs fail as time goes by, others are just a means for the creators and developers to earn easy money and the third group are projects that don't even need the blockchain at all for their business ideas, they are just using it because of the hype and popularity of this new technology.

[Thirdspace]

I have been pondering the effect of scams on the cryptocurrency market. Are investors who fall victim to ICO scams more likely to move to Bitcoin or is it a case of 'once bitten twice shy' and they avoid cryptocurrency investments altogether?
~
As an investor, how have you handled losses and scams in ICOs?

it depends on the type of the investor itself, their ultimately goal is profit but...
pure profit-driven investor lacking knowledge/interest in cryptocurrency would leave and stay away
tech-driven investor with strong interest in cryptocurrency would move to bitcoin and learn more

[boyptc]

As an investor, how have you handled losses and scams in ICOs?

I've handled losses patiently and just dealt with it thinking that I can recover that in some other days, weeks or even for years. I never invested to an ICO so I can't tackle that much.

But in trading and buying, investing, I've lost a good amount of money which I became emotional with it. I just can't remove it on my mind on how much I've lost but life goes on. I accepted it and just moved on. My mistake of buying altcoins that caught my interest didn't do good to me so I think it's one of the reason why many are also buying bitcoin and just let the price value grow on their wallets.

[Kasabus]

Obviously they will look for a profitable and safer investment, and that is bitcoin.

However, ICO is kind of lost in the space already due to lack of support from investors as they have found a safe haven which is the IEO.

I don't think ICO can still recover with the safe rules in place as its reputation was already destroyed and in fact, those who plan to launch their project by crowd funding understands it and they now look for an exchange partnership to host their project, that way they have a chance to raise a decent amount.

[Hedonie]

I am an investor, and i want to argument in favor of ICO. why ?

Because, the reality behind STO, is the regulation make it very difficult for small investors to have access to it. the market is reserved for accredited investors only that are  monopolising the start-up funding market. allowing to small investors to invest only several round of funding later (or to donate on regular crowdfunding website, wtf?).

I would prefers STO to ICO, only if STO could be made accessible to all the investors. even the student that got only $1000 in is bank account.

otherwise trading and transfer restriction on security token just kill the utility of the token if only part of the population is allowed to own it.

my humble opinion, otherwise STO would be like a come back to the previous model, and what people did on that forum, next generation students won't get same opportunity as you guys had back in the days.

 seriously, with the STO model, i wont even be allowed here as many investors. how much money did you invest when you started with bitcoin ?

[mk4]

Obviously they will look for a profitable and safer investment, and that is bitcoin.

Not necessarily. Trust me when I say that huge losses(whether from ICOs or from existing coins/tokens) can easily turn off an inexperienced trader/investor from the cryptocurrency markets.

I am an investor, and i want to argument in favor of ICO. why ?

ICOs aren't necessarily bad per se(besides some/most being unregulated), the problem is scammers taking advantage of ICOs being unregulated; hence they can easily run away with their investor's money.

[Upgrade00]

You. don't. need. to. buy. one. full. bitcoin. If you want to invest in bitcoin for the long term, you don't necessarily need to go in on one go. You can simply dollar cost average weekly or monthly, to slowly but surely get your bitcoin stack up.

With the fluctuations in price, I believe one would need an idea of trading to know when would be a safe time to buy and when would not be. But you're ultimately right, steady investments would work for someone going in long-term.

it depends on the type of the investor itself, their ultimately goal is profit but...

To an extent we're all kind of profits driven, those interested in the tech have identified ways it can improve their lives.
I think the difference is those who want profit irrespective of whether their actions harm the network, and those who want to create a healthy environment while profiting.

[Upgrade00]

I am an investor, and i want to argument in favor of ICO. why ?

ICOs have been profitable and useful to the cryptocurrency network, but the rapid growth of scams overran the functionality of the sector.

seriously, with the STO model, i wont even be allowed here as many investors. how much money did you invest when you started with bitcoin ?

I have been involved in STOs which did not need you to have a fat bank account, it only required verification of the investor, it was the developers who needed to get registered under SEC to protect the investors; large and small.

[Hedonie]

Hi Upgrade00 !

ICOs have been profitable and useful to the cryptocurrency network, but the rapid growth of scams overran the functionality of the sector.

I have been involved in STOs which did not need you to have a fat bank account, it only required verification of the investor, it was the developers who needed to get registered under SEC to protect the investors; large and small.

I can't agree more with you. the crypto space got polluted by too many scam, making ICO awful average investment return.... i believed the money wasted by the scam ICO rating/advertising mafia, have been integrated to the price, and it is not finish for all these tokens now at average price that is more fair...

may i ask on which website, you use that didn't requested investors certificate ? what about the trading and transfert of the asset after the sale, are they restricted ?

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some useful article about STO.
https://hackernoon.com/security-token-offerings-stos-what-you-need-to-know-8628574d11e2
https://medium.com/lgogroup/understanding-the-regulatory-framework-of-security-tokens-9b231118cab4
https://medium.com/@Alt.Estate/legal-aspects-of-security-token-offering-sto-8e8fdfae307e

If I understand well, i am not lawyer.

The major drawback for security tokens are exemptions limited to institutional investors is the requirements to limit sale and resale to accredited investors. This both limits the potential audience and requires the issuer to continuously verify that tokens are not resold to non-accredited investors.