When to invest in EOS or IOTA or any ICO? Would you watch this video or read the full post at https://steemit.com/eos/@jerrybanfiel… because you will see a complete system helpful for deciding when to buy any new cryptocurrency?
Let’s look at the story of Steem and Zcash for guidance. More than a year after release, Steem is a proven investment with low risk and high reward today because of the odds of a price increase and the ability to participate on Steemit which has hundreds of thousands of users and makes thousands in payments to authors every day.
When was the best time to buy into Steem? A year ago Steem had potential but no proven results. Today buying Steem is much safer especially for the casual buyer because the odds of a reward just from holding Steem are higher and the risks of a price drop are lower given the data presented later. For the enthusiastic all in buyer, investing steadily over the last year would have been ideal and also would leave little time or energy to invest in anything else! It also might have been tempting during the down times to sell out and jump in with something else only to miss out on the biggest opportunities for growth!
How did Zcash perform after a huge initial release the first year? Zcash came out with a huge initial price spike followed by an epic drop from $4239 for 1 Zcash to as low as under $30 within a year. What a wild ride that would not be fun if the only goal was to make money!
How are Steem and Zcash a mirror for EOS, IOTA, and most any initial coin offering? What journey can a buyer of EOS or IOTA expected based on what those buying Steem and Zcash faced during the first year? Would we take a look together because it might save us a lot of time and money?
Located in the USA? EOS does not make the tokens available for sale to buyers in the United States because of the following legal terms listed at https://eos.io/faq.html.
Seeing that EOS was not available in the USA unless I bought on Bitfinex or another exchange made deciding not to invest in EOS simple for me and motivated further research into why I already have been avoiding buying into new cryptocurrency ICOs?
First, will we look at risk because famous investor Warren Buffett’s number one rule of investing is “Never lose money”? Does buying into an ICO or a cryptocurrency at least one year after release provide a much lower risk? Yes because with over a year of data on a proven currency, we can easily look back to get an idea of whether the price today is low, high, or about right. When a new digital currency is launched, we have no reference point to see how low the price was when no one wanted to buy and how high it got when the excitement was maximum. Clearly buying in during the initial coin offering is a huge risk because how can we determine if the value is accurate on a cryptocurrency that just launched?
Second, will we look at a comparison with investing in startups because initial coin offerings are a very close comparison to angel investing or venture capital investments in a new startup company? When funding startups with capital, the loss rate is huge with investors expecting to make a profit on small percentage of total investments which hopefully will cover losses. Venture capital firms often are lucky to pick 1 out of 4 winners with 75% companies they invest in not even providing the initial investment back and only maybe 1 out of 200 being a really high return. With initial coin offerings, the rate of success is likely to be similar because like a startup company just beginning to get to work, there is a lot of hope and promise of changing the world with few proven results. In talking to most people, it is easy to see how almost everyone has amazing ideas that change the world while very few of those ideas are actually executed with most failing fast.
Initial Coin Offerings are usually a trap like Leia tried to warn Luke Skywalker about in The Empire Strikes back which despite being the second star wars movie released is Episode V. Like Luke, we might lose our right hand financially as the dark lord of the currency reveals himself to be our father. While some humor is attempted here, the message is clear. It is better to wait and let every new cryptocurrency prove itself before making a significant investment.
If you would like to keep reading, would you join me on Steemit at https://steemit.com/eos/@jerrybanfiel… because the full article goes into more detail?
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