In the same way, it would make perfect sense for Hedge Funds to invest early, or even start actual pyramid schemes, yet we've prevented that. Junk like this is not healthy for the market.
Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
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Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#12This article gave no specific examples of a hedge fund actually flipping a position.
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#13This is hilarious; the hedge funds are scamming the scammers.
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#14ICOs, cryptocurrencies, highly speculative assets are a high risk gamble, hard to tell which one will succeed, if it was easy we'll all be rich, only way to win is by using the information you have available and only invest what you can afford to lose
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#15You mean to tell me that investors don't actually want their digital Beanie Babies and are trying to pitch them to suckers after getting them cheap to make money? Colour me shocked. It's like nobody learned anything from the early 2000s.
I don't think they forgot the lessons. Its just that the allure of quick money is just too great for many people. I think this might be why a lot of people get addicted to gambling, for instance.
In this case, I think most people are aware its a bubble/ponzi scheme and are trying to "beat it" by making the most profit and getting out ASAP before the bust.
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#16Aren't they taking on somewhat more risk by contributing large sums of money earlier on? I kind of think the discount is acceptable, but there should be stronger terms around the ability to flip it immediately.
Yeah, I don't see it as "holding the bag". People are greedy and are now sad they can't find anyone to buy their pyramid scheme tokens.
If these ICOs are now requiring accredited investors, why does there not seem to be the same level of SEC scrutiny that any normal hedge fund must have?
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#17> Startups often need access to capital to promote ICOs. This should be a huge red flag. If a business is spending the majority of the money from early investors to find more investors, rather than actually developing and marketing their product, that's pretty much a text book pyramid scheme.
It's hardly textbook: previous investors are not being directly paid from incoming funds.
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#18> Startups often need access to capital to promote ICOs. This should be a huge red flag. If a business is spending the majority of the money from early investors to find more investors, rather than actually developing and marketing their product, that's pretty much a text book pyramid scheme.
A huge proportion of the ICOs I investigate turn out to be pure facade. It's amazing to me just how quickly this con was honed and formalized, but I guess people have always been good at aping when it comes to get-rich-quick bandwagons.
The standard ICO consists solely of: 1) A slick website. 2) A well-produced video. 3) A whitepaper that discusses trivially standard blockchain features and goals. No differentiation necessary. 4) The appearance that prominent or well-credentialed people are working on the "technology".
That's all. The "product" is vapor. The real product is another pump & dump vehicle to satisfy the insatiable demand for pump & dump vehicles. This product is sold to the "investors" during the ICO. Said "investors" are even explicitly awarded more coins for shilling the pump everywhere by creating amateurish articles and YouTube videos.
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#19Even if an ICO does manage to have a novel idea, as soon as someone buys up the company guess how much the coins are worth?
Re: Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag
#20uhhhh this is no different than venture capital or any revered seed or angel stage investor.
the only way to be outraged by this is to be completely ignorant of everything around you.
accredited investor laws perpetuate this. the rich get richer, the poor get children.