Monday, December 11, 2017

Are There Risks Involved In Investing In ICOS?

By Armando Rod


Bitcoin became the new face of an asset that created interests of a lot of investors. The price of the Bitcoins increased recently to an amount of more than 10000 dollars, which increased higher to even gold. With the rapid popularity of Bitcoins, the increase in value from the time it was introduced and the profit it gave to the investors, there are more and more investors looking to invest on other cryptocurrencies in the belief of getting the same returns as offered by Bitcoins.

Studies suggest a majority of the current popular digital coins from the Initial Coin Offerings as considered by the financial market, one-third of it had been regulated as a security, this is what the studies of the crypto market suggested. The studies also take interests in whether the initial coin offerings were made by giving out public statements about giving out good returns or whether they had tangible working products.

Initial Coin Offerings have become a good way to generate crowd funding, it definitely becomes easy to get the desired finance for the business with the help of ICOs. You can take the help of the Blockchain space, which plays an important role in the issuing of a new cryptocurrency to the initial investors on the company in return of the Bitcoin or using flat currency or other available digital currencies.

The SEC took steps to warn the industry and people that in case these digital coins or ICOs were given out in the form of securities similar to shares stocks or bonds then it has to be registered with the commission. Moreover, if this happens the regulatory bodies will also advice the industry to return the funds to the investors and they might also induce fine of the companies.

ICOs are similar to IPOs, but in the issuing of digital currency, there is no involvement of the distribution of actual share of the newly launched company. However, you are provided with a digital token that act as an indirect share of the company, whose value increases depending on the supply and demand of the cryptocurrency and the market value is established by the investors trading the digital currency on the cryptocurrency exchanges.

To have higher information of the ICOs, they may be digital coupons or tokens which might be brought through organizations in a blockchain that is similar to what is discovered with Bitcoins and other cryptocurrency. But, unlike stocks the ICOs, do now not provide you the employer ownership rights but the traders put money into them considering that the venture or business shall achieve success and the cost of the tokens shall upward push to advantage income. Now, to get privy to the increase in the fee of cryptocurrency, you have to have right understanding approximately the ICOs. You do keep in mind that the investments such made are in the perception of having short and strong returns.

Investments made with ICOs offers investors a great platform to make lucrative earnings within few months. For an instance, Bitcoins were priced at 5000 Bitcoins for 27 dollars in 2009, which now has increased amazingly to a number of 11000 dollars and it keeps increasing.

Lastly the most important thing that a start-up has to take care of is that the investors are spending their money on the tokens in the expectation of making profitable returns in the future. Thus, this brings in the need for having the right motivation for the investments. In case the digital currencies or the ICOs are issued for investment reasons and even the companies are issuing the tokens knowing that they are looked as an investment by the buyers, it will definitely create a hope of getting returns and make profits, which can definitely be troublesome.




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