Topic: Recent Fall in Crypto might pressure ICOs to sell their crypto... (Read 169 times)

I think that in fact this fall in crypto is mainly due to all the very successful ICOs of the mid and late 2017.

On the supply side, these need to pay real bills in the real world and they need to sell cryptos. Many of them, as the OP says, will progressively yet constantly liquidate their crypto. In fact, they have the responsibility of doing what is best for their investors and that means that if the EHT and BTC prices dip, they have to sell in order to keep their funds from disappearing. Hodling is a luxury they can´t afford.

On the demand side, after the boom of December and January, many buyers were able to cash out with x2 to x5 multipliers in a couple of months in their investments and that caused the levels to go back to September prices. In order to keep the prices up, the demand for new investment based on cryptocurrencies should be at least as high as it was during the previous months and that is not going to be the case during a bear market, thus deepening the downward trend.

Finally, the largest problem of all is that most of the projects are heavily linked to Bitcoin and Ethereum prices. If you think of a company that gets funds in, lets say, euros, it would not make any sense for it to raise and fall with the euro to dollar change rate, because it is a company that has a project and should be simply linked to good or bad news regarding the development. Why is this not happening? Perhaps because we have built the house starting by the roof, that is, we have a full economic system with currencies, exchanges and mechanisms for investing and providing dividends, yet we all know that those project take a minimum of a few years to mature, but the nature of the average investor is more in the line of those who are looking for a x2 in a month.

All these are growing pains.

Investors like us can hold but ICOs need to sell cryptos to remain operational. The problem is that since the price of crypto fall, they will run out of fund much quicker. This also means that they are more pressured to sell their cryptos. And in large quantities if they feel like the price is gonna drop even further. However, that creates a chain where that will drop the price and pressure other ICOs to dump theirs as well. Now this vicious cycle won't apply to ICOs that are already profitable or diversified their fund. However, considering that most didn't, this is a serious issue.