ICOs have already turned many into millionaires thanks to massive token price increases. But ICOs have also left many scammed without any way to retrieve their initial investments. What are the pros and cons of ICOs?
This is as much of a pro as it is a con. ICOs provide investors with tokens that are usually easily exchangeable for other assets or fiat shortly after the ICO has been concluded. If an investor is unhappy with the course the project is taking they are able to quickly exchange their tokens.
Because these tokens have high liquidity, investors can also have ‘real-time’ pricing of their token.
Unlike IPOs, ICOs are accessible to anyone, anywhere, anytime. No major initial investments, great connections with the right people, or other things one is not able to obtain easily are needed to invest in ICOs.
This makes ICOs very accessible to anyone, which is one of the reasons why ICOs have gotten so massively popular.
Instant community support
ICOs are essentially crowdfunding campaigns for blockchain startups, which has various benefits. First and foremost these projects will have massive community support. All investors have a vested interest in seeing the project succeed, as this will likely increase the price of the token of the project. Because of this massive support these projects have to spend less money on marketing which can then be used to fund innovation.
Easy to conduct
Just like high liquidity, this property of ICOs is as much of a con as it is a pro. Currently, conducting an ICO is by no means difficult and therefore a very viable option for a relatively new and small company to raise funds to materialize their ideas. By conducting an ICO a new company has the ability to potentially raise a lot of funds in a short amount of time.