Home token ICO advisors in the valuation of initial coin offerings (ICOs)

ICO advisors in the valuation of initial coin offerings (ICOs)

It was no longer possible to ignore the statistics. Most initial coin offerings (ICOs) tank and remain tanked once the tokens are traded on cryptocurrency exchanges, after the initial frenzy and “FOMO” of the crowdsale has passed.

The vast majority of those who keep track of the ICO phenomenon universally agree that the trend in the last few months has been for ICOs to lose value after the crowdsale, with many buyers hoping in vain for the “moon” they were promised once the cryptocurrency is listed on a cryptocurrency exchange platform.

Despite this, there has been little discussion about the underlying cause of the phenomenon, and about what it is that participants in a crowdsale, including the rating companies on which we rely to make our decisions, must be doing incorrectly in their selection of which initial coin offering (ICO) is most valuable or has the best chance of increasing in value once the crowdsale has concluded.

In spite of the fact that there are numerous legitimate reasons for the phenomenon, there is one fact that I believe is probably more responsible for it than most other contending reasons: ICO token valuation and an incorrect emphasis on “blockchain experts,” “ICO advisors,” or “technical whizkids” in the case of erc20 tokens (ethereum-based cryptocurrency).

When a project is judged based on those criteria, I have always believed that the need for blockchain technical experts or ICO technical advisors is exaggerated, if not outright misplaced. This is especially true if the project is attempting to develop a completely new cryptocurrency concept. Among the most important considerations for most ERC20 tokens and copycat coins should be the business plan behind the token as well as the managerial antecedents and executive profiles of the team leaders who will be in charge of the token.

Anybody who works in the cryptocurrency industry should be aware that creating an ERC20 token from Ethereum, or a similar token from other cryptocurrencies, does not necessitate extensive technical knowledge or the services of an overpriced blockchain advisor (as a matter of fact, with new software out there, an ERC20 token can be done in less than 10 minutes by a complete technical newbie).

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Consequently, technical difficulties should no longer be a source of concern for tokens.

The business plan, level of business experience, and competence of the project leaders, as well as the business marketing strategy of the primary company raising the funds, should be the most important factors to consider.

As an attorney and business consultant to several companies around the world for more than 30 years, I’m baffled as to why people keep looking for some Russian, Korean, or Chinese “Crypto Whiz” or “Crypto Advisor” to assess the strength of an ICO, which is basically a crowdfunding campaign for an entrepreneurial concept.

I am of the firm belief that this is one of the primary reasons why most initial coin offerings (ICOs) fail to live up to the hype generated prior to their launch. Given the abundance of token creation software, platforms, and freelancers available today, placing excessive emphasis on the blockchain experience or technical ability of the promoters is largely misguided. It’s analogous to attempting to determine the likely success of a company based on the ability of its employees to develop a good website or mobile application. With the proliferation of technical hands on freelancing sites such as Guru, Upwork, freelancer, and even Fiverr, that train has long since left the station.

It appears that people are getting too caught up in the hype and technical qualifications of those who are promoting an ICO, particularly for ERC20 Ethereum-based tokens, and then wonder why a technically superior Russian, Chinese, or Korean guy cannot deliver the business end of a company after the fundraising campaign has concluded.

However, even among our ICO rating companies, a significant number of points were awarded for the crypto experience of team members, the number of crypto advisors they had on their team, and the number of successful ICOs they had on their team, rather than the underlying business model to be developed with the funds raised.

People’s focus will shift away from technical aspects and toward more relevant work such as evaluating the business idea itself and corporate business plans once they realize that over 90% of the cryptos and initial coin offerings (ICOs) out there are simply tokens created to raise funds for a specific idea and not just to raise funds for the sake of raising funds.

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We will begin to value the future prospects or value of our tokens once we have entered this era of evaluation before deciding whether to buy or invest in a cryptocurrency based on sound business considerations such as: -Swot Analysis of the company and its promoters; managerial competence and experience of the team leaders; the soundness of business ideas beyond the creation of a token; the marketing plan and strategy of the company to sell those ideas; the ability of the company to raise capital.

What most people fail to realize is that the potential for their tokens to rise in value following an ICO is not so much dependent on technical factors as it is on positive developments within the company, the raising of funds, and the perceived increase in the company’s valuation as it implements its business plan and delivers on its business products.

Of course, purchasing cryptocurrency does not equate to purchasing stock, nor does it equate to purchasing security in any company. We understand, but tokens react in much the same way that stocks do when a company receives positive or negative news about itself. The only difference is that, in the case of cryptos, the effect is multiplied by a factor of a hundred hundred thousand times.

Because of this, when a company achieves a certain metric in its financial or business operations, the price of its token on the exchange will rise — and it will fall rapidly when nothing positive occurs. What the company plans to do and how it intends to do it following the ICO should be of the utmost concern to those who do not want to see the value of their tokens plummet and remain low indefinitely.

Although most tokens would plummet once they were listed on a crypto exchange following the ICO due to the desire of investors to profit immediately, whether they would ever rise again to provide you with the expected multiple-digit profits will always depend on the criteria I’ve already outlined above. As soon as you purchase a token, the value of the “crypto advisor” and “technical whizkids” decreases to zero in relation to the potential for your tokens to skyrocket to the moon.

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According to this reality, a wise crypto buyer or investor should place less emphasis on the number of crypto advisors a project has or the technical soundness of the team (unless the company’s underpinning business is technical in nature), and place more emphasis on the managerial, marketing, and potential customer base of the company seeking to raise funds through an ICO.

More points should be spent on the business and management aspects of an ICO rather than on technical jargon, which will not help your token perform well in the marketplace once the funds have been collected.

Most initial coin offerings (ICOs) tank and remain tanked once the tokens are traded on cryptocurrency exchanges. The need for ICO technical advisors is exaggerated, if not outright misplaced. Creating an ERC20 token from. does not necessitate extensive technical knowledge or the services of an overpriced. advisor.

Most initial coin offerings (ICOs) fail to live up to the hype generated prior to their launch. People are getting too caught up in the hype and technical qualifications of those promoting an ICO. The business plan, level of business experience, and competence of the project leaders should be the most important factors. The potential for a company’s tokens to rise in value following an ICO is not so much dependent on technical factors as it is on positive developments within the company. Purchasing cryptocurrency does not equate to purchasing stock, nor does it equate to security in any company. The price of a company’s token will rise or fall depending on what the company does and how it intends to do it.

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