Two critical issues: liquidity and volatility

amishmanish

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Quote from: so98nn on April 07, 2018, 05:47:32 AM

I fairly doubt if such ICOs really require the amount they raised to come into operation. Most of the successful ICOs from 2017 still have 80-90% of fund raised on their one or more addresses. So before thinking of liquidity aspect, first important question is whether ICO has such large business that actually requires millions of dollars? The answer is no in most of the cases, that's why they are troubled by local authorities, tax authorities, etc. because they can't justify the use of funds and are forced to keep them as it is.
Else otherwise, market has instant liquidity of ETH. You can sell thousand a day without affecting market at all.

None of the ICOs give you a breakdown of how exactly they plan to spend the investment. Most of them are ERC-20 tokens and their products are supposed to be running on the Ethereum blockchain. This is part of the promise that Ethereum can become the "global decentralized computer" for development of Dapps. The scalability issues show that this is quite the pipe dream.

The problem with ICO's is not just liquidity but also the development. The products/ softwares they are supposed to be developing on a blockchain (whether their own or ETH based), actually don't have enough users and features to warrant the kind of Ethereum requirement that would justify their usage.

As part of self-regulation, if these ICOs want to be taken seriously, maybe they should really start giving out audited figures regarding their projected gas requirements for development, testing and usage before they become self-reliant.

For as long as they have been here, the requirement has never been rationalized. They just assume that it'll all be money when it really isn't that.

andreijoaquin

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We all know once we enter crypto market volatility is something that we cannot prevent nor eliminate. But with regards to liquidity we can do something for it, we must become wise in choosing which coin to invest and which one has the highest chance of success in investment. We can make our own research so that the likely hood of failure can be eliminated. There are still good ICOs to choose from I think.

EvaGC

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Quote from: vaughn125 on April 07, 2018, 11:19:44 AM

Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

Hmm.. Pretty interesting project you have there, really caught my eye. It would be pretty nice to be this sure with all your crypto funds. The thing is, by having this assurance, you sacrifice the chance to get higher profits just because you wanna be safer. Not that I am saying that it is wrong but it would clearly take away the though of earning more due to the volatility of this industry. But still, this project can be used into greater advantage by traders if it's fees will be minimal. I think this project is worth a shot, I will be keeping an eye.

You're probably right in everything you said. Globcoin CEO has said in a presentation that they're "not looking for short-term winners" and their Whitepaper also says something like "they do not recommend to buy their tokens with speculative purposes". It's clearly not one of those projects that will feed from the market hype and I even dare saying that it's targeted to investors whose gains do not come from volatility (and are rather trying to be protected from it)

vaughn125

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

Hmm.. Pretty interesting project you have there, really caught my eye. It would be pretty nice to be this sure with all your crypto funds. The thing is, by having this assurance, you sacrifice the chance to get higher profits just because you wanna be safer. Not that I am saying that it is wrong but it would clearly take away the though of earning more due to the volatility of this industry. But still, this project can be used into greater advantage by traders if it's fees will be minimal. I think this project is worth a shot, I will be keeping an eye.

Quraline

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The money collected on the ICO will always be used. The only question is in whose interests, investors or managers.

krauzzer02

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

I'm wondering I've read this thread before anyway if you are going to have an opposite perspective on this: ICO's accepting cryptocurrency which has established a strong community, capitalization, and adaptability liquidity is not an issue if they are going to choose the right coin for the payment methods. The same thing with volatility, cryptocurrencies like bitcoin and ETH are the most used to buy tokens to fund the projects, volatility is the concern cause it may go down anytime but to view this on the bright side, let say you've managed to raise $1 mln in ETH and bitcoin in the bear market season, we can expect that anytime bullish trend will strike and that would be X5 or above.

yojodojo21

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Quote from: dothebeats on April 07, 2018, 05:30:37 AM

That problem would be up to those investors who placed money into such ICOs without realizing that their money would remain stagnant without receiving any real utility over their received products. In the case of bitcoin, there are several service providers which accepts bitcoin as a payment method, so the economy somehow is not stagnant since the cryptocurrency flows around. But in ICOs? The money will stay where it's at and would not be put into good use whatsoever.

Some investors do these kind of way, not because they are wise enough but i think, they just do it, especially those who participated within the given time of presale, and afterwards if that specific token or coin get listed on any exchange site, most of the time if the investors distinguish if the coin is not good for long term then it will be immediately get dumped for sure, and dumpers affect the market that is why volatility is now lesser than last year december, (greater).

Panda Trump

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

Liquidity is one of the reasons why most ICOs only accept the most popular cryptocurrencies, like Bitcoin & Ethereum.
It's because those top cryptos can be sold for fiat currencies quite easily. These fiat currencies can then be used to pay for the expenses.

Volatility is a true killer, but I think most ICOs sell at least a part early on to avoid failure due to extreme price crashes.
Besides, the cryptocurrencies they raised could also show significant growth, which would allow the project developers to get even richer. (Or they could spend it on the project... Though I'm quite sure most of the project creators wouldn't mind some extra pay)

So I feel like it's not that hard to use them in a practical way. By simply raising the top few cryptocurrencies, they can easily sell them and they're usually reasonably stable too. Growth also allows for some nice additional profits.

so98nn

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

I fairly doubt if such ICOs really require the amount they raised to come into operation. Most of the successful ICOs from 2017 still have 80-90% of fund raised on their one or more addresses. So before thinking of liquidity aspect, first important question is whether ICO has such large business that actually requires millions of dollars? The answer is no in most of the cases, that's why they are troubled by local authorities, tax authorities, etc. because they can't justify the use of funds and are forced to keep them as it is.
Else otherwise, market has instant liquidity of ETH. You can sell thousand a day without affecting market at all.

dothebeats

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Cashback 15%

That problem would be up to those investors who placed money into such ICOs without realizing that their money would remain stagnant without receiving any real utility over their received products. In the case of bitcoin, there are several service providers which accepts bitcoin as a payment method, so the economy somehow is not stagnant since the cryptocurrency flows around. But in ICOs? The money will stay where it's at and would not be put into good use whatsoever.

ningrum

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The OGz Club

Quote from: nur rochid on April 07, 2018, 04:03:50 AM

indeed if i just collect funds without a clear roadmap, i think it will be loss, but if there is a clear roadmap and products running, so the circulation becomes big then price will rise

yes indeed we need clarity as well, so as not to make a fatal mistake. so in doing something it also needs clear info as well.

VUToken

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

Liquidity is an easy issue to overcome. If one is patient, massive liquidations can be spread out over multiple exchanges, and over time. Volatility is the real issue. Until we get more adoption, it doesn't take a lot of selling to make a major effect on the price.

St4yInTh3D4rk

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"STAY IN THE DARK"

Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

We still are not ready to use crypto currency in our daily life so if you are investing in crypto just wait for the time surely it will come when we use cryptos for everything.But if you have 1 Million in ETH you just simply go to an exchange where you can sell that ETH and pay the rent just easy.

nur rochid

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indeed if i just collect funds without a clear roadmap, i think it will be loss, but if there is a clear roadmap and products running, so the circulation becomes big then price will rise

Thamon

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A critical issue is whether the price volatility of listed real assets reflects true changes in the ... asset volatility because they are unduly influenced by liquidity

millgates

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Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

Maybe you should change your investment strategy. I suggest you to choose investment type that provide passive income, so you can always use your passive income. Keep focus on gaining asset, if you are young then it is your advantage because you have more time to grow it. Realestate investment is always on of best investment, if you don't have that big capital to buy one then you can try to looking for masternode coin.

destroyer01

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Market volatility accompany decreases in both stock returns and liquidity and the effect of volatility shock on stock returns is greater for stocks with more domestic or foreign institutional trading.Individual investors mitigate the negative effect of volatility shock on stock returns. The interaction effect of market volatility and liquidity on stock returns is stronger for stocks with more foreign institutional trading.

gua86402

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At present, ico is the financing activity of unsupervised. Today's ico is incomplete and immature, and there are still some problems caused by many fraudulent activities!

The us began to regulate ico in order to guarantee the interests of investors!

NYINY

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Quote from: aso118 on March 20, 2018, 03:50:13 PM

Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

ICOs raise money in order to put them to use in development of their project. They do not raise money to speculate on the value of other cryptocurrencies. So the best option for an ICO would be to sell the coins raised for fiat, or at least to hedge partially. Even in the case of the Ethereum ICO, the bitcoins which were raised were converted to fiat. (it actually caused a drop in the value of Bitcoin at that time).

I agree with what was said

aso118

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★Nitrogensports.eu★

Quote from: EvaGC on March 20, 2018, 01:03:31 PM

«That’s what’s happening to today’s ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, it’s incredibly hard to use them in a practical way.

Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I can’t use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now I’m asking myself….»

Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139

ICOs raise money in order to put them to use in development of their project. They do not raise money to speculate on the value of other cryptocurrencies. So the best option for an ICO would be to sell the coins raised for fiat, or at least to hedge partially. Even in the case of the Ethereum ICO, the bitcoins which were raised were converted to fiat. (it actually caused a drop in the value of Bitcoin at that time).

Topic: Two critical issues: liquidity and volatility (Read 248 times)