Bitcoin ICO and crowd sales is a way of raising funds by floating a new cryptocurrency in the bitcoin market. It's more or less similar to a company's initial public offer (IPO) of shares in the stock exchange market. Whereas IPO's are highly regulated, ICO is not. Regardless of the above, bitcoin has enjoyed high success rate and this explains why many bitcoin altcoin ico projects are popping up. Indeed, going public is a pleasant experience and an exciting event as it offers countless advantages to both the bitcoin operations as well as the investor. Sadly, the move also has certain disadvantages.
Here are the pros and cons of bitcoin ICO and crowd sales to the investor.
Pros
Capital gain
Capital gain in ICO is an increase in the value of the initial investment that results to a higher worth than the offer or purchase price. Without a doubt, this is perhaps the major advantage of undertaking an ICO. A capital gain may be realized in short-term (a year or less) or in long-term (more than a year). There are countless bitcoin investors out there who have joined the millionaire's club by taking advantage of ICO's.
Ease of trade
Whether you intend to fully immerse yourself into cryptocurrency market or engage the services of a market expert, investing in bitcoin is as easy as a click of a mouse. Remember, the market is unregulated and so there are few hurdles or restrictions to its accessibility and participation. But just like any other investment, utmost diligence, as well as in-depth research in the sector, is critical to success.
Flexibility
There are a greater ease and flexibility of investing in Initial coin offer. There are no strict regulations and so one can choose to invest as much or as little capital as she wants. Actually, to hedge against the future poor performance of a given bitcoin, you can spread the risk by investing in several ICO's. Should the venture not go as predicted, an investor can easily change the strategy by simply chickening put. In ICO, no one is locked in for a fixed term and there aren't penalties for exiting.
Liquidity
Most cryptocurrencies are highly liquid assets. Should there arise a need of cash after a successful ICO, the investor can easily sell the bitcoins. So long as the bitcoins are from reputable platforms they will be sold within a short notice.
Abundant and rich Information
Investing blindly without understanding and knowledge is just pure speculation and relies entirely on luck. This need not happen when undertaking an ICO. Today, there is a lot of valuable information available online and from industry experts. Indeed, this information can help even greenhorns in the industry make an informed decision before buying into an ICO and afterward help them manage their bitcoin portfolios.
Cons
Scams
Bitcoin market isn't immune to scams and up to now, many investors still consider the industry new and simple industry jargons like bitcoin, cryptocurrency, ICO's and much more are new to them. Well, lack of knowledge common with new investor may be considered a risk in bitcoin altcoin ico projects. Many investors have fallen into scams in the name of ICO ripping them off their hard earned money. Therefore, transparency is key in any ICO and the investors need to be on the watch out before parting with their money. To be on the safe side, learn to work with industry experts.
Volatility
Like any other financial instrument, bitcoins are highly volatile. Do not be surprised if a well-performing bitcoin acquired in ICO suddenly fall in price. Countless factors can lead to this including industry speculation.
