Topic: Would BTC shake off an ICO shite implosion? (Read 424 times)

SEC will shake em off

https://bitcointalksearch.org/topic/2018-06-07-sec-chair-on-what-is-a-security-icos-like-eth-4433244

I believe he is only talking about ICOs here and as far as they go, there is mainly ICO_token/ETH markets available for majority of them, specially the big crappy ones that distribute a lot of useless tokens among people who participate in their scheme. in which case if they want to dump their coins and get out they have to sell it for ETH and then sell ETH for fiat.

I hardly see the name of the King among news about scam ICOs. Even ETH doesn't suffer much. Most people value the possibility to organize ICO itself higher than its' negative outcomes.

That's not really a worry. All that money is tied up in the Ethereum ecosystem. Not bitcoin. ICO implosion would seriously possibly permanently hurt Ethereum. Bitcoin would be just fine. Maybe it would create a temporary crash in Bitcoin just because of negative sentiment of such an event occurring, but once the sentiment had passed Bitcoin would be perfectly fine and might actually be stronger because surely some of that money would go into Bitcoin instead of leaving the market entirely.

I was purely referring to the trash talk happening, not so much to the similarities or the lack of similarities between the industries.

We don't really need an altcoin for that. If we look at how LN enables atomic swaps, we can basically become an exchange ourselves from within our clients. It will allow everyone to exchange one coin for the other without much effort, and without needing anything than our own clients, and the best is that we are getting closer to it with the day (even though it can still take more than a year to become an actual user friendly main net thing). It will also combat market manipulation since you aren't forced to buy from one or more sources. The entire market will become your source.

Their is always new option of way to promote the new altcoins, when bitcoin started it was getting promoted then new coins came and promotion was done in the way of AIRDROP (giving coins freely to promote it) same time Signature Campaign was also used. Then came Social Bounty campaign. Last year ICO boom started and almost all new altcoins promoted same way and this promotion is very big scammy way. As the coin developers get the fund in the ICO itself so even if they dont promote their coin they got the fund to scam and run away.

No, I'm not talking about late investors, but innovators or early adopters at best. Bitcoin is not even at 1% global adoption. The Internet is still only at 50% adoption! We've still got a lot of room to run in BOTH.

All I’m saying is IMO timing matters if a shitcoin implosion were to happen. If shitcoins implode on the current adoption on-ramp (<1-2%), they might pull Bitcoin down with them. If they implode nearer the steep bend in adoption (2-5%), when regulators and institutions start paving the way for dumb money to at least feel smarter about investing in Bitcoin, then maybe it won't matter so much.






From your valuation curve, I really don't believe we've left the smart money phase yet. We're just barely approaching the take-off point. Institutional investors have hardly if even arrived. The public and media are still dumb AF when it comes to crypto. We're no where near McAfee's eat-a-dick valuation! Bitcoin is where the Internet was in 1993 IMO. These last few bubbles we've experienced are just parasitic fractal blips on the back of the monster "Paradigm" bubble to come.

But, sure, smart money can be thought of as a conduit for dumb money, if you want to look at it that way. Smart money has always been about making even more money from the sheeples. Maybe I should have called it Big Money. Semantics.

$350B total market cap is nothing compared to the potential. A drop in the bucket. There is still plenty of easy money to be made. Saying easy money is over in crypto is like saying Internet commerce reached its full potential in 2000, a full 10 years after the world's first web browser emerged. Big money knows this and they are coming. Much like the Internet, the cryptocurrency success case will be decades in the making. We haven't even reached one decade yet.


I completely agree, Bitcoin is our rock and slow consensus is just dandy. I highly doubt segwit/lighting/rootstock/etc will be the be-all-end-all of crypto, but I do think they will play an early role in propelling BTC along the adoption curve away from the cloud and stink of shitcoins. Shitcoins can integrate all the interoperability and bells and whistles they want, but it won't make much difference to the world at large until crypto can first prove to the market and regulators they aren't all just bubbles and scams. I still think BTC has the best chance to do this if we can get the timing and technology right.

It's too bad shitcoin developers don't realize how much their success truly depends on Bitcoin succeeding first. They are muddying the waters at a critical time in Bitcoin's evolution for their own personal gain and greed.

There is plenty of time and room to debate the myriad of controversial features AFTER the first true success case of regulation, adoption and utility. I just worry shitcoins will ruin it for all, or at least set us back a decade, much like Timothy Leary set us back decades in psychedelic research and the war on drugs for being just plain stupid.


Exactly, this is a forum. I’m here to learn from others and test out my own ideas; I’m not here to be contentious. You obviously have a deeper knowledge base and have given me more to think about, so thank you, but I still have no idea what impact you think a shitcoin implosion might have on Bitcoin, despite all your commentary. Your counterpoints might have a lot more impact if you offered a perspective to hang them on. Obviously, you don’t owe me anything but maybe you owe it to yourself to appear more cogent. 

To my mind, this ICO bubble can't affect industry or BTH or ETH greatly. The industry is really pushed forward by real developers and big investors, which anyway choose wisely and carefully. So, scams can only spoil image of crypto society in media, cause we here know that it has nothing to do with serious projects and future technologies

I suppose BTC can't avoid being associated with all other cryptos in general. Common mind still makes little difference between various coins and bad rep of scam ICOs will spoil the one of Bitcoin as well, though it sounds unlogical

sounds like you're talking about mainstream (late) investors. hence "near the top of the s-curve."

i'm not disagreeing with what you're generally saying, it's just not what people usually mean by smart money, at least in crypto: https://www.reddit.com/r/Silverbugs/comments/4q5p6i/the_market_cycle_smart_money_vs_dumb_money/

when every tom, dick and harry working at wal mart is accessing bitcoin instruments through their retirement fund, i imagine we're officially in the "dumb money" stage.

what i was actually getting at was the trader's perspective. i've been trading this market for years, and let me tell you: 4-5 years ago there was so much money on the table. the days of easy money are long over in this market (outside of shitcoin pump and dump riding).....bitcoin trades much like gold and other chop fests now because the smart money arrived years ago IMO.


what made you think lightning and rootstock are the end-all-be-all of crypto? if anything, lightning makes inter-protocol use cases more interesting.

and remember, sidechains are just altcoins that can interact with bitcoin. they're shitcoins, not bitcoins. they have different security/trust models, they can have different supply/demand models than bitcoin and they can certainly carry different value. interoperability with bitcoin is good for shitcoins---not the other way around. in any case, i assume (based on the incentives involved) that shitcoins will continue integrating features far faster than bitcoin will. that's actually good for bitcoin. bitcoin is our rock, and we don't want it integrating every gimmick for no good reason.

bitcoin moves slow, and i think that's actually what the market likes.

and do you really believe that consensus forks are obsolete in bitcoin? what was the point of bip9 and bip8 then? fixing tx malleability in future versions doesn't address everything under the sun by any means. unless you think lightning is somehow a catch all for all use cases imaginable?

further, there are features/mechanisms that would be highly controversial to integrate to bitcoin, whether by their nature or because they'd require hard forks---replacing POW with less energy-intensive means, removing the public blockchain, integrating full on-chain privacy, etc. there would always be a market for crypto that integrates things that simply won't be ported to bitcoin.


i never argued that bitcoin is bearish or that this can't happen. i was just responding to your claims that shitcoins will go the way of the dodo cuz segwit and lightning, that shitcoins won't have regulated futures markets, etc


uh, you made some claims (some baseless, others unclear) that i either disagreed with or wanted clarity on. so i posted a reply. this is a forum BTW. now i need to provide you a thesis? lol?

The dotcom bubble itself has a relation to the wider market so its an indicator for BTC but not a determiner.  There is a ratio between ETH and BTC which can just reduce in value and I dont think it has to be a drag on BTC any more then other crypto standards. 

Some might say its a positive as it reduces competition to BTC as the main standard.   I think that might be true longer term after the fall in price of ETH.     We are basically talking about deleveraging of value as ICO Enterprise does not return the growth in value promised and so ETH overall is less in demand with excess supply from some of these funds unwinding.   Thats an excess of ETH, so BTC will just adjust in its multiple.

"Smart Money" institutions with actual fiduciary responsibilities are expecting regulated, insured, custodial markets with mitigated risk. That is the whole point. They want to see Bitcoin fully legitimized as an asset class rather than operating in the shadows. They want to be assured that another Mt Gox or Bitfinex or take your pick of exchange hacks, scams, or fraud won't happen again. And if it does happen, they want to know Lloyd's of London has got their back.

Hedge funds and private equity are one thing, but mutual funds, pensions, ETFs, index funds, etc are a whole other ball game with a much lower bar for risk, leverage, and derivative exposure. Hedge funds are only available to accredited investors with high net worth (+$1M). They are far more speculative, leveraged, and managed by a different set of rules and regulations.

How many people do you know are actually invested in hedge funds? How many invested in mutual funds? Practically everyone with a workplace sponsored retirement plan is invested in mutual funds.

True adoption will not occur until regulation allows smart money the opportunity for everyone to get involved, easily. Not just speculative high rollers or tech savvy trendsetters.


With Segwit in place, what more do Lightning Labs and Rootstock need from Bitcoin consensus? Layer 2/Layer 3 operate independently at their own pace.


Established Regulated Exchanges, Brokerages, & Banks (ICE, NYSE, Nasdaq, Fidelity, Monex, Cboe, CME, JPM, GS, etc)
FinTech (Gemini, Circle, Square, Coinbase, Revolut, BitGo, etc)
Fiduciaries (Ameriprise, Mutual Funds, Index Funds, etc)
Endowments & Pensions (Harvard, Stanford, Yale, non-profits, NGOs, Corporate, Government, etc)
Custodials (Xapo, Coinbase, BitGo, ItBit, Nomura)
OTC (Cumberland, ItBit, Genesis, etc)

Even a tiny percent currently invested in commodities (gold, oil, potash) redirected towards Bitcoin would have a HUGE impact on price.

You aren't offering any new perspective in your commentary; merely dissecting and counterpointing mine. What is your point on topic?

I won't bother running the numbers, but given the multitude of altcoin/BTC markets (and the fact that even alts with significant fiat pairs have liquid BTC pairs too) I'd assume it's true.

I also think BTC is the first flight to safety, but in a long term bear market, those who flocked to it for safety will sell too. That spells downward pressure all around.


Historically, downward pressure on ETH means downward pressure on BTC. This reminds me of an old gem from Charlie Shrem last year, LOL:

I'm in the "BTC is king" camp, but that's a bit shortsighted. That's like saying BTC's only use case is simple payments. That's basically all it's good for. The "store of value" arguments apply to any cryptocurrency with a limited supply and low/no inflation. So then, much of Bitcoin's value is purely speculative based on future adoption. The same goes for altcoins: the platforms aren't built yet, the current apps and contracts are useless and risky. That may be true forever; it may not. That doesn't mean ETH's only use case is ICOs.

ah, the proverbial "smart money." what exactly do people mean by this?

hedge funds have been here since at least early-mid 2014. that's when HFT algos started dominating, particularly in the chinese futures markets. lots of former goldman, etc traders brought their bot game to the markets. from 2015 on, this market is highly algo driven as a result.

traditional institutions and fund managers create spinoffs for this sort of thing---they don't expose blue chip balance sheets to unregulated markets. hedge funds and VC capital has been with us for years, though. i'm not sure what people are expecting---GS and JPmorgan to list actual spot BTC on their balance sheets? that's a meaningless metric, and it'll probably happen near the top of the s-curve.


fortunately for shitcoins, bitcoin consensus moves at a snail's pace. if bitcoin could incorporate the plethora of shitcoin features (or would want to, in the case of alternative consensus modes, sharding, etc) within multiple decades, i would be very surprised.


who?


maybe, maybe not. these things move very fast. the CME just announced a partnership with crypto facilities ltd to supply a real-time index and reference rate for ETH.

i point this out because the Cboe and gemini struck a similar partnership a few months before the Cboe brought their futures product to market.

also, the Cboe's president hinted they might launch ETH and BCH futures markets. so there's that.

But there's a difference about it, dont you think? Bitcoin is completely different from the system Buffet and Munger are living in, whereas ICOs try to do the same thing that bitcoin do, with a few exceptions.

Personally, I would like a altcoin that could store an exchange inside its own blockchain, so that you can have a P2P exchange in your computer. This altcoin would work as a kind of tether, and since every user would have a copy of it, there would be no risk of the exchange being "hacked" or raided by the government.

I'm not so sure about that these days. Most of it will be ETH and there's not too far off just as many routes out for that. I'd expect ETH to get fooking obliterated as that's really its one and only 'use case'.

It would absolutely get hit by ico exploding. Most of the money is extracted through bitcoin, when the time to cash out comes...
It would however recover in full, not suffer long term consequences, it has nothing to do with icos at all
It is mine opinion

I must appreciate this line of thought that this is taking a look at things in a different way and I would kind of agree that bitcoin would survive but not unscathed because without being over bloating it, ICOs also play some roles in the increasing the awareness of bitcoin to the outside population because since the various regulations of ICOs, the restriction on the advertisement that can be carried out, there has been a dip to in the activities of bitcoin too. The reason is not far fetched when these ICOs do their advertisement, you dont buy with fiat but you have to buy with BTC which indirectly means advertising bitcoin.

The reason why I think bitcoin will survive is that its was not an ICO in itself or set up for the provision of finance of a project in addition to the ground foundation that makes bitcoin to be sought after to keep funds and trade for other type of coins.

It might have a link to the great depression that we encountered but I think that it's more a consequence than a pure reason. Sure the ICO aren't doing any good to btc as most of them (not all of course, some are legitimate) are nothing more than big fat scams. But there have been scams in btc since the begining. The difference here is that tons of people were taken in the fucking btc hype exactly like the first big jump to 15k and the same people saw the price going down a bit (maybe linked to the ICOs) and completely panicked.

Now serious buyers have to come by and are slowly eating back what the panick noobs left behind. It gonna take some time but we'll see a slow and steady rise of the price I'm pretty sure of it.

If they are 'exiting' that way, it means buying bitcoins for altcoins and then selling those bitcoins for cash. While I agree that the overall market sentiment will be negative, I would only think that Bitcoin dominance would increase. This would be a flight to safety in the crypto world and this would actually be good for Biitcoin in the long run.

Great thread @gentlemand !


They are already illegal in some countries.
However, I wonder if ICOs would still have the same appeal to gullible newbies when
they would be more regulated. One of the reasons that ICOs did so well in 2017 was the fact
that everyone could easily jump on board by buying a few BTC or ETH at Coinbase.
In the beginning most ICOs didn´t even require KYC or whitelisting and didn´t exclude people
from heavily populated countries like the US.

If ICOs become too regulated, it will become difficult to invest for most people, which will once again
favor venture capitalists, who have no problem with KYC or high minimum investments.

as long as money is involved and as long as it is easy to make it using the alternative market there is always going to be a lot of shitstrom where a bunch of greedy people pour their money into just to lose it to a bunch of other people who see the gullibility level and want to abuse it.
so if the ICO shit implosion ends there will be another shit implosion in the altcoin market right after that and with a different method and different name but basically the same principals.

and bitcoin will remain under the pressure that this side-market puts on bitcoin until it becomes too big that the space between bitcoin and the whole altcoin market becomes too huge to have any effect on it.

ICOs are just a mess IMO to the price of all crypto, mainly BTC and ETH. I think ICOs in general need refinement, as in there is just too much of them. This craze has somewhat messed the prices up.

ICOs need more regulation, so I wouldn't be surprised if they become illegal in some countries.

However, the price of BTC depends on a lot of factors, not just ICOs or whatever it may be. There was too much of a craze in 2017 that some are just tired now in 2018.

Bitcoiners are the Warren Buffetts and Charlie Mungers of the crypto industry. People blame these oldies for talking trash about Bitcoin, but we as Bitcoiners tend to do exactly the same when it comes to altcoins and tokens. I personally have been doing that as well, but we should all acknowledge that there is indeed more than Bitcoin, and we won't be getting rid of them.

I strongly believe that once the filtering of coins has somewhat completed, that we'll be left with a small bucket of coins and tokens actually serving a purpose other than speculation. I also strongly believe that we need altcoins to balance things out. If we talk about mass adoption, then Bitcoin just isn't enough to serve people in that regard. Bitcoin can take care of the basic aspects, where altcoins can clutter their blockchains with smart contracts and all things basic users don't care about.

the markets are connected to each other and affect each other too. and it works somewhat both ways. when shitcoins are getting pumped 1000% at a time, people see this and want to become rich (in their dreams LOL) so they want to jump in. for many of them including ICOs they would need to buy bitcoin first then invest that in these craps. then when they implode and the dumping comes they run away fast too and that means exiting the same way they came in which means more sells of bitcoin.

so we can't say bitcoin is going to come out without a "scratch". the real question is "HOW MUCH SCRATCH".

A lot might depend on timing.

Small time retail investors on unregulated exchanges dominate market liquidity at the moment, many of whom are late-comers distracted by the cloud of shitcoins gathered around honey-badger's napping bunghole.


hippo honey: how ICOs are born

But smart money is on the verge of moving in, from wall street to institutional, not to mention the hundreds of hedge funds and other OTC whales already hemming and hawing in cryptospace.

Once regulated exchanges start offering better BTC custody solutions for these big boys, paving the way for ETFs and the like, retail investors (along with the slew of unregulated exchanges) might start to become irrelevant, much like they already are with the stock markets.

If the SEC and other global regulators start spraying ICOcide before smart money moves in, BTC could be at real risk, even halting or at least delaying progress in the smart money space.

But if smart money moves into BTC sooner, as expected by the end of this year and into next, before the SEC is able to take much action against ICOs and their ilk, BTC might already be immune by that point.

A lot might also depend on the timing of layer 2/layer 3 protocols; the lightning network and rootstock smart contracts and all that, incorporating a lot of the functionality shitcoins currently tout as BTC side chains/protocols.

This is all assuming smart money really is smart enough to recognize BTC as the one true coin. Which I think, for the most part, they are. These are the same guys who've been setting up BTC futures and pushing for ETFs all along. There's not a single shitcoin anywhere near attaining a futures market so far as I know. Best the shitcoins can hope for is being included in an overall crypto index fund, like Coinbase is offering.

ps. check out this mesmerizing but also sickening animated crypto market evolution, too large to post in its entirety here...


https://t.me/CryptoAquariumChannel/1585

there may be lots of scam ICOs, but i wouldn't paint every one with that brush.

i also don't think they're going away---at all. people seem to think there's going to be some new regulations that outlaw ICOs or something. on the contrary, ICOs will just be brought into the regulatory fold, at least in the major nations. just like with cryptocurrencies, governments can't stop these p2p transactions. they will adapt and conform to new standards.

don't use the scam ICOs to hide the fact that ICOs break down important financial barriers. they make retail securities investment far more accessible to people---even in poor and less developed countries. lots of VC capital seems to recognize the importance of this. yet lots of bitcoiners seem to think everything besides BTC is just going to disappear one day. fat chance, methinks!

Up until now, I can't grasp the fact that a lot of people still see bitcoin and ICOs as the same entities when in fact, ICOs only use the shadow of bitcoin's success to advertise their (scammy) offerings to the public. If in case the crackdown for ICOs continues, I doubt bitcoin will be affected too much. It might get involved in a day or two since both belongs to the crypto market, but afterwards it would recover and simply shake everything off as what bitcoin used to do with these sort of things.

Many ICOs try to replicate successful ones and end up being scammy if expectations weren't met. ICOs would be put to end soon. Other cryptos might be affected but it will only be for a short while.

i think an ICO implosion spells blood bath for BTC as well.

most people note that the crypto markets are broadly correlated, but few discuss the macro effects of altcoin markets on the BTC supply side. since most altcoins (and nearly all ICO tokens) trade predominantly against BTC, this creates latent demand for BTC: anyone who wants to buy these tokens generally needs to buy BTC first. as long as every BTC bought on the altcoin markets isn't dumped immediately back to fiat, this is a net drain on BTC supply and therefore a boon for the price.

here's the flip side of that: let's say the ICO market becomes a stampede headed for the exits, with everyone dumping for BTC. at least some of that BTC is going to get dumped on the BTC-fiat markets. that's a net drain on the price.

the markets should be correlated in both directions.


yeah, altcoins/tokens rise harder and fall harder than BTC. more volatile in both directions.

It would definitely take a hit too but I think it won't be that heavy. In the long term though, I think it would affect the demand for bitcoin if ever those ICO shits implode and die but bitcoin's price might become more stable than it is now when those ICO coins are gone for good. By then, speculation might subside a bit(because those ICO's are part of the reason why bitcoin is being a speculative tool nowadays) helping market to become healthier.

Bitcoin will definitely recover after an initial blow. Instead of capital flowing into rubbish ICOs, it will largely flow into Bitcoin directly, which is where it belongs. 

I must admit that Ethereum did extremely well serving as a platform on which these ICOs thrive, but I can't see it continue endlessly. At some point people wake up and realize how much of an empty put this industry is.

The market will also become more professional in the coming years, and professional parties always prefer a foundation they can build trust on, and only Bitcoin is capable of providing that.

I kinda feel sorry for those putting too much faith in altcoins, because they really can't beat Bitcoin's simplicity that with lightning network will render altcoins even more obsolete. Quality over quantity, always.

The SEC won't really have to power off anything because the ICO hype will power off itself eventually. The SEC is just one entity representing the US, which is quite a large market indeed, but there is more than just that market. All the Ether fan boys however think that because of its current POW nature it won't be classified as a security, so we have to wait and see how merciful the SEC is in that regard. I have nothing against Ethereum so it won't change much for me, but I wonder what effect it will have on Bitcoin with potentially lower demand for Ethereum. Altcoins do help keeping a lot Bitcoins out of direct circulation, and Ethereum's position might be somewhat significant in this case.

I d say it depends how much the SEC will power off the ICOs from the market, since all are securities, even ETH is.

Signs for that are already seen at the horizon.

I think it's valid myself.

Dotcom bubble - new tech, no one knows what the hell to do it, hey, let's create some shit and pump. Death. Resurrection when people do figure what it's good for.

That's the same trajectory that crypto will follow in terms of the utility coins at least. I don't believe any of them will get anywhere long term. They're all solutions scratching around for a problem and they're all clunky as fuck.

Bitcoin and its brethren focus on one simple job and try to do it well which may insulate them from an absolute cratering.

I always believed that ICO's were the absolute trash of this ecosystem. I honestly haven't seen any altcoin actually impress me with their flashy features and gimmicks no one even cares about. I have never been that keen on people comparing crypto to the dot-com-bubble, but where I do agree with that comparison, is when it concerns all these ICO's representing nothing more than empty ideas and companies we might not even hear about anymore in the coming few years. I must however point out that regardless of how I dislike all these ICO's, they contribute to Bitcoin's demand. In most cases you enter these ICO's with Ethereum or Bitcoin, and with how hyped up the ICO market is right now, it helps keeping coins out of direct circulation

I was perusing an article the other where the little fella specifically named ICOs as the doomed dotcom bubble and specifically left Bitcoin out of it. This is a fairly rare occurrence as usually it's lumped in with all the junk.

What are your views on this? Could all of the shit out there implode and die and Bitcoin carry on relatively unscathed or would it take a heavy hit too? I don't really see how it could just shake it off as I'm sure a large amount of the BTC buying was to pile in to that space.

Are they separate enough markets these days?