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 ProductVirtual 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 DreamsIt 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 ManagementThe 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.
LawUndoubtedly, 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.
RiskAnother 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.
Now investors become clever and invest just in project which has experienced team, MVP, real apply for blockchain and
influential mentors. Yes, last year was good for people who want easely gather money for their unreal product, but it is ok for innovation sphere.