The statistics could no longer be ignored. Most ICOs tank, and are shelved, once the tokens hit crypto exchanges, after the ‘FOMO’ of going to the crowdsale is over.
Most observers who follow the ICO phenomenon agree that the trend in recent months has been for ICOs to lose value after they sell, with many buyers waiting in vain for the promised ‘moon’ once a cryptocurrency is listed on an exchange. the portal
However, what is not discussed is the main reason why we witness this phenomenon, and the participants in a crowdsale, including the rating companies that most of us trust to make the selection, must be wrong in choosing the most valuable ICOs. or has the best probability of increasing in value once the crowdsale is over.
Although there are many reasons that can legitimize the phenomenon, I think it is probably more responsible than most of the other controversial reasons: the valuation of ICO tokens and the wrong emphasis on “blockchain experts”, “ICO consultants”. ‘ or ‘technical whizkids’ for erc20 tokens.
I’ve always thought that the need for blockchain technical experts or ICO technical advisors is overkill, or completely inappropriate, when a project is judged by that criteria, unless the project is actually trying to create a new coin concept. For most ERC20 Tokens and copy coins, the real important consideration should be the Business Plan behind the token and the management backgrounds and executive profiles of the Team Leaders.
As anyone involved in the industry should know, creating an ERC20 token from Ethereum, or similar tokens from other cryptocurrencies, doesn’t require a lot of technical skills or an over-rated blockchain consultant (indeed, with new software, An ERC20 Token can be made in less than 10 minutes by a complete technical innovator.
So the technical shouldn’t matter much for the tokens anymore). The key should be the business plan; level of business experience; the parent company’s business marketing strategy that includes the ability and funds of the project managers.
Honestly, as a lawyer and business consultant for over 30 years in various companies worldwide, I cannot understand why they continue to look for Russian or Korean or Chinese “Crypto Whiz” or “Crypto Advisor” to determine the strength of an ICO. since it is basically a crowdfunding campaign for a BUSINESS CONCEPT…
I strongly believe that this is one of the main reasons why most ICOs do not have pre-launch announcements. In an age where token creation software, platforms, and freelancers abound, a disproportionate focus on the blockchain experience or technical ability of developers is mostly absent. It’s like trying to judge the likely success of a company based on the ability of its employees to create a good website or app. That train left the station a long time ago with the proliferation of technical hands in autonomous areas like Guru; Upwork, freelance and even Fiverr.
People seemed to get caught up in the hype and technical qualifications of people promoting an ICO, especially ERC20 Ethereum based tokens and then wonder why a technically superior Russian, Chinese or Korean guy can’t run the business end of the company after the fundraising campaign.
Many of our ICO Rating companies also seemed to assign a disproportionate amount of points to the crypto experience of their team members, how many crypto advisors they have and their ICO success experience on their team, rather than focusing on the underlying business model. will be created with the collected funds
When you understand that over 90% of cryptos and ICOs out there are just tokens created to crowdfund an idea, and not a token for a token’s sake, then people’s emphasis will shift from technical angles to more important evaluation work. the business idea itself, and the corporate business plan.
When we enter this era of evaluation before deciding whether to buy or invest in a cryptocurrency, we then begin to assess the future prospects or value of our token based on business considerations such as:
– Swot Analysis of the company and its promoters
– Management skills and experience of the team leaders
– The strength of the business idea beyond the creation of a token
– The company’s marketing plan and strategy to sell these ideas
– The ability to deliver the underlying products to the market
– The customer base of the products and services that the company will create
– and the basis for projecting adoption in the market
What most people don’t realize is that the potential for their tokens to increase in value after the ICO is not so much dependent on anything technical, but rather on good things happening in the company, raising funds and a perceived increase in the company’s valuation. he unfolds his business plan and delivers his business products.
Of course, buying cryptocurrency is not buying stocks, and it is not buying the security of any company. We get that, but tokens react the same way stocks react to good news or bad news about a company. The only difference is that in the case of cryptos, the effect is magnified 100 times.
So when a company hits a financial or business milestone, the price of its token in exchange will go up…and quickly drop when nothing good happens. So what the company will do and how it will do it after the ICO should be of utmost importance to anyone who doesn’t want the value of their Tokens to crash and stay down forever.
Of course, most tokens would go down when the token hits the crypto exchange after the ICO, because they want to make an immediate profit, but whether it will return to give the expected multi-digit profit will always depend on the criteria. I have already stated above. After buying a token, the value of ‘crypto advisor’ and ‘technical wizkids’ goes to zero relative to the potential of your tokens to the moon.
Following this reality, I believe that a smart crypto buyer or investor should focus less on how many crypto consultants a project has or how technically strong the team is (unless the company’s main business is technical in nature) and focus more on management, company marketing and potential customers. Raising funds through an ICO.
In other words, allocate more points to the business and management side of the ICO than to the technical jargon that won’t help your token market once the money is raised!