Read about this guy: https://en.wikipedia.org/wiki/Charles_Ponzi
Rule #1: Always be at the top of the pyramid. (from Scam Larimer, Coin-Pick-up artist)
Topic: Help me to understand an aspect of crowdsales. (Read 238 times)
If the startup keep holding ETH and it falls, then of course he's losing some of its value...
There're numerous ways to deal with that:
1. Exchange some of it to fiat (to develop the product, to pay employees, etc)
2. Exchange some to other coins in order (hopefully) to split the risk between many coins
3. There are hedge funds that help you mitigating with that risk, but of course you pay for it...
But that's definitely an issue for companies and foundations that are raising funds using crowdsales
There're numerous ways to deal with that:
1. Exchange some of it to fiat (to develop the product, to pay employees, etc)
2. Exchange some to other coins in order (hopefully) to split the risk between many coins
3. There are hedge funds that help you mitigating with that risk, but of course you pay for it...
But that's definitely an issue for companies and foundations that are raising funds using crowdsales
So every crowdsale that I have witnessed in the last few months use ETH or BTC as an investment tool. My curiosity lies in the ever-changing value of both respective coins. If you are to invest 10 ETH right now and the price falls 100$ over the next 6 months, that has to mean goodbye to the startup? Are these ICO's basing their entire company on the fact that ETH and BTC rise in the future? That seems like a sizeable risk to take and invest so much time money and energy into just to watch them fall; or another coin to take their spot. Is there a part of every startup dedicated to constantly trading the investment coin to stay on top of the one with the highest value? Or am I understanding this all wrong.
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