Crypto Coins: Research: Why I don't invest into ICOs anymore
Why I don't review/invest into ICOs anymore
Market situation
Market has been in the downtrend since January.
While in downtrend the more stable investments are usually doing better (Bitcoin, Ethereum). This means that Bitcoin and Ethereum are more likely to retain more value (even when losing against USD) when compared to ICO tokens.
Oversaturation
More and more ICOs are introduced with many ICOs that basically do the same thing as already established coins. Why would people invest something that is just starting instead of already established brand with development team that has been working on the coin for a long time?
More competition like this means there is less demand for the tokens introduced in the ICOs which affects the rate of return
Scams and poor quality
There are more scams, obvious cash grabs and poor projects than ever since people are trying to quickly profit in the cryptocurrency hype.
Because of that it's difficult to find legit projects with bright future.
There were several successful scams in the past where the people behind the ICO were able to run away with investors money which further increases FUD (fear uncertainty, doubt) and that means less investors
The risk/reward ratio is quite often not worth it since finding good ICOs is super hard and there's also a chance of investing into losing project.
Returns
Majority of ICOs nowadays actually lose money when compared to fiat/ETH/BTC so considering research and the investment takes time you are esentially wasting time to lose money.
Out of the recent projects only few actually generated
money with majority losing against BTC/ETH and usually
fiat if the investment took place after January:
The reason for bad ROI is a combination of all previous
points and currently it's unclear even if better market
conditions would change much.
Conclusion
Nowadays investing into ICOs is risky, takes time for both research and investment process and rarely actually generates money.
In most cases the money is actually lost which defeats the purpose.
There is simply no reason to invest into ICOs unless you really really like the ICO (superb existing team, great token economics, interesting and unique idea etc) and even then it might not generate a nice return.
Because of that I have also stopped doing reviews - don't want to endorse something that will lose money.
Once the market is bullish the situation might change but I don't think we will see the x10 returns like we did last year anymore.
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