Gambling has for the longest time been an industry for the extreme risk takers. There seems to be no time now or in the future when this will change. When cryptocurrency was introduced, few people understood it. It is only after the price of Bitcoin sprung from nothing to $20,000 in a few months that established firms such as J.P Morgan & Chase Bank noticed. The cryptocurrency market as a whole rose by over 400,000% to be valued at close to $800 billion at the start of January 2018. This is the time many governments and central banks came rushing in declaring that trading in cryptos was risky. Tough regulations were introduced and in some jurisdictions, a total ban was issued on both cryptos and ICOs. In these Initial Coin Offering ratings, you will find that in some cases, the move taken by authorities at times showed the officials involved did not even understand what blockchain technology is all about.
ICOs are now quite popular. There are very few regulations and restrictions and it is the perfect place where a business can source for funds. Hardly will you come across a crypto which did not have its initial capital emanate from an ICO. In June 2017, an Ethereum-based altcoin by the name Bancor held its ICO. At a teeth-shattering speed, more than $153 million was raised in just three hours. More incredulously was when BAT ICO raised $35 million in a mere 30 seconds period. Such is the thrill that ICOs can bring. On the other hand, there have been ICOs which have managed to raise $20,000 in four days and yet a huge number of ICOs imitate this trend or worse.
When an ICO is launched, there are usually two outcomes; either total success or total failure. There are usually no in-betweens. When you see an ICO such as Filecoin which helped raise over $250 million, there are other ICOs in the shadows that attracted less than $5,000. This is despite the fact that such ICOs were intended to rake in maybe $200 million.
Many cryptocurrency investors are looking for a crypto whose value will increase exponentially immediately upon getting listed. Many hope that a token they bought at $0.05 during the ICO will command a price of $2 a few days after getting listed. This is how many cryptocurrency billionaires and millionaires such as Chris Larsen, Tyler & Cameron Winklevoss and Michael Novogratz got rich. By investing just $1,000 in such an ICO, it would mean that if such an investor sells their entire tokens when the price reaches $2, they would fetch a cool $40,000.
Don't forget that the exact opposite can happen. In many instances, it is the case. Take the case of Aventus (AVT) token whose ICO token price was $3.1. In just two weeks after its launch, the price of the token was below $1.5. While the price surged to pass the $7 mark, it dropped and again and on 9th April 2018, the price was $0.87. There are countless such cases. But as is the case with our society, the winners are focused on while the losers are tossed to a corner.
There is no way to know how a token will perform after an ICO. There are those who were banking on BOScoin token to shoot and command a price of at least $1,000. The ICO raised more than $24 million and the price for each token was $4. A few months down the line, the price of the token is $0.1. Meaning that a person who invested $1,000 during the ICO launch can only get loose change amounting to $25.
So, yes, ICOs are the investments for gamblers. Many enter ICOs, hoping the token or coin price will shoot through the roof. But as it is with gambling, winners are few and scattered while losers are many and close.