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Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

nytimes.com

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Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#41

Post by rothbardrand »

acjohnson55 wrote: post #29
walrus1066 wrote: post #15

Earlier quoted context omitted.

Beware that: “The market can stay irrational longer than you can stay solvent.” (John Maynard Keynes) Especially relevant to short selling

100%. I agree that BTC has been in a bubble, but if I had ever acted on this hunch, I'd be so far underwater right now. There's no telling how long the rally might continue, nor where the correction will settle. The other commenter made the astute observation that the less leveraged way to make this bet would be to go long on some competing asset.

One of my personal indicators that Bitcoin is in a bubble is when Bitcoin articles on hacker news are overrun with people talking about their bitcoin related businesses, instead of being overrun with skeptics and people saying it's in a "bubble".

We have gone from %90 negative a couple years ago on HN to about %50 negative today.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#42

Post by api »

Is there an honest non-scummy way to raise capital through this mechanism for something without an inherent scarcity built into the system and that doesn't carry nasty future litigation risks (or at least doesn't carry them more than a SAFE or a convertible note)?

My impression so far is no but I could be wrong.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#43

Post by joosters »

anovikov wrote: post #30

Most ICOs usually exclude Americans. Because these scamsters know it's a bad idea to get Uncle Sam angry.

Bizarrely, some of these non-American ICOs still advertise in the US. I can't remember the exact ICOs, but some have paid for billboard ads, taxi ads, and so on. I suspect that the 'no Americans' is just a tickbox that they know is easy for their investors to ignore.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#44

Post by rothbardrand »

s73ver wrote: post #31
AznHisoka wrote: post #18

Earlier quoted context omitted.

And I'm investing in Bitcoin. Just because it is at its peak doesn't mean it can't go even higher! I might be crazy, but your perspective isn't any more rational than mine :)

Isn't that the problem, though? Bitcoin was supposed to be a medium of exchange. Cash for the internet, in other words. Investing means that people really aren't going to be doing that, and it's just going to sit on a dusty flash drive on the shelf.

Not in the least. Bitcoin has many uses, and is a fundamentally new technology. Naturally it's going thru the technology adoption life cycle and every few months/years it catches up to the wider levels of adoption and more mature use cases.

It will become a currency when most of it has been mined and it's in widespread use and there aren't billions of people who have never heard of it... the price will stabilize then.

It's an error to think that the only use of bitcoin is as a currency. (in the traditional sense)

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#45

Post by rothbardrand »

polotics wrote: post #36
d3vnet wrote: post #17

So how about making investors explicitly state that they are not US persons?

Makes no difference I think. Burden of proof is on the emitter. Matt Levine at Bloomberg has it explained perfectly: The ICO emitters seem to have no idea that once the SEC declares an ICO to be a security, any US-person investor who had put their money in such an unregistered security and lost some, is entitled by the full force of the law to all of their $, paid back in full...

All of their $ or all of their ETH? Most ICOs don't take $.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#46

Post by joosters »

api wrote: post #42

Is there an honest non-scummy way to raise capital through this mechanism for something without an inherent scarcity built into the system and that doesn't carry nasty future litigation risks (or at least doesn't carry them more than a SAFE or a convertible note)? My impression so far is no but I could be wrong.

None so far. There's plenty of crowdfunding sites that could be used instead, but ICOs allow the companies to raise money before they even produce a beta of their software. They also have no investor protection, so the company has no obligations to deliver. Finally, these people know that there is a pool of investors out there who think that crypto coins are bound to increase in value, so they will throw money at any new coin.

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#47

Post by solotronics »

vanattab wrote: post #3

I am thinking a short position in bitcoin is in my near future. I am not saying bitcoin is doomed to fail but I am pretty confident this shit coin crazy is going to hit the fan sooner or later and it's going to drag the "legitimate" crypto currencies down.

the financial past is littered with the corpses of BTC shorts.

Something to consider is that most of the ICO buyers would prefer to exit to BTC rather than exit to fiat currency. Possibly an ICO crash would make BTC go even higher.

Actually, short BTC please.. I need more fuel for my long position :]

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#48

Post by solotronics »

fourstar wrote: post #4
vanattab wrote: post #3

I am thinking a short position in bitcoin is in my near future. I am not saying bitcoin is doomed to fail but I am pretty confident this shit coin crazy is going to hit the fan sooner or later and it's going to drag the "legitimate" crypto currencies down.

How would you even go about doing that?

also, you can short the GBTC security on your brokerage account

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#49

Post by ajross »

rib3ye wrote: post #37

The problem is projects like these: http://bitqyck.me/ A classic hard-sell 80s pump and dump scam reborn in the ETH era. Bitqyck came to my attention through a family friend with very limited understanding of cryptocurrency, but just enough financial literacy to be in an investment group being fed these scams by people they trust as technical leadership. I imagine, ultimately, these people will demand protection from…

The problem is the whole idea of cryptocurrency as a growth investment. The symptom is a bunch of copycat scams trying to freeload on the broader market. Without the bull market of the early '90's, Belfort would have had no one to sell to. Same deal here. The root cause is the insanity happening in bitcoin (and now Ethereal, I guess).

Mark my words: this will all come crashing down. I can't tell you when or why, but it's not sustainable. Probably it will happen in a way that makes the bitcoin nerds "right" in some sense of personal justice: the PRC will close the great firewall to bitcoin traffic, or backdoor the protocol in some unsupportable way. Or the SEC will shut it down somehow.

So sure: when the crash happens cryptocurrency "would have worked" if not for the meddling government. But it will fail nonetheless, and all those people (again, most of whom are not investors in scams like bitqyck) are going to lose all their "money".

Re: Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows

#50

Post by kristofferR »

joosters wrote: post #43
anovikov wrote: post #30

Most ICOs usually exclude Americans. Because these scamsters know it's a bad idea to get Uncle Sam angry.

Bizarrely, some of these non-American ICOs still advertise in the US. I can't remember the exact ICOs, but some have paid for billboard ads, taxi ads, and so on. I suspect that the 'no Americans' is just a tickbox that they know is easy for their investors to ignore.

Yeah, EOS had both a Times Square ad and a no US investor policy: https://twitter.com/jeffscottward/status/879434713114578946
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