Inicial Coin Offering

ICO is not riskier than IPO

ICO News

ICO’s FUD is commonplace no only in the sphere of traditional finances but in crypto world as well. Some states that “ICO is dead” but this thesis doesn’t hold a water. The risks associated with ICO look not bigger than IPO and shares market inherit. 86% of ICO coins came down in their valuation after pre-sale and main sale period but this figure is about tokens whose issuance started in 2017 year and there is no evidence that tokens whose circulation began this year may exactly duplicate this grim patter. Moreover, above mentioned figure look more natural and honest way to develop financial instruments since these figures embody the real risks any investors face, and we see that these risks find reflection in coin prices.

In comparison, if one looks to the shares market with its IPO (Initial Public Offering) of shares then one may figure out that the current capitalization of huge amount of shares is supported by murky techniques in the form of shares buybacks aimed in the most cases just to prop the valuation of companies whose shares fluctuate at the Wall-Street. The last week of October was heralded by doubling of buybacks from $50 to $110 billion. Actually buybacks may soar to 48% of S&P valuation.

If one compares ICO to venture funds’ backed finance then one may mark that as Harvard professor Shikhar Ghosh argues, 75% of US VC-funded startups fail. And this figure looks as a verdict but the prices slashing for the most ICO tokens may just signalize the downturn as a part of coins’ prices cyclical movement.

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