Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag

Ok, raise your hand if you didn't see this one coming.

The (significant) downside of limiting early investment to accredited investors is that the early investors are the ones who gain the most profits. They're also the ones who take the most risk of losing the most. People seem to want low-risk high-reward investments and that demanding the appropriate laws will give it to them.

The thing that ICOs seem to have not caught onto yet is that early investors are mostly in it for the flip, as evidenced by so many ICOs quickly dropping below ICO price. This is easily solved by restricting delivery of the tokens to a company-benefiting schedule. The difficult decision will be balancing the imposed illiquidity with attracting enough initial capital to be viewed as attractive to later investors.

You 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.

> 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.

Early retail investors in ICOs are not going to be very happy with returns down the line I don't think...meanwhile, hedge funds thrive anywhere there is volatility, and crypto is nothing but volatile.