Tokens to ICO more expensive in tens times, and the Russian Central Bank warns of danger
Material posted: Publication date: 05-09-2017
For several years the value of bitcoin is growing in accordance with Moore's law: the price roughly doubles every eight months. In the conditions of guaranteed supply shortages, growth can still continue for some time. Against this background, there is another interesting phenomenon — the initial placement of cryptocurrencies or tokens ("ICO", initial coin offering) which became a real mania in the financial markets, writes The Wall Street Journal (translation of the newspaper "Vedomosti"). It can be compared with the dot-com boom, when stocks of Internet companies has also grown by leaps and bounds. Many have been enriched by it, but most just lost their money when the bubble burst.

Now the statistics is overwhelming: according to CoinDesk, using ICO this year attracted about $1.5 billion And according to Smith & Crown, when the price of tokens increased, they showed an average growth of 28 times. For example, the tokens music platform Voise from June to August of 2017 has risen 453%, and the coins of the company Etheroll increased from $0.06 to $165, and then fell to $4,15.

ICO is a cross between an initial public offering (IPO) and crowdfunding. Golden cryptolibrary hit Russia: across the country held spontaneous meeting of investors and startups who dream to have a quick go on ICO and collect a lot of money for your project. Something similar happened on the stock exchange of WebMoney, where companies have been offering "virtual shares" of their startups and even paid him dividends. The cost of some "stock" has soared several times, but often the history of investment ended very sadly.

Among the ICO, the proportion of unsuccessful startups is about 40%. According to statistics from Smith & Crown, in 2017, conducted more than 100 locations in 10% of cases the price of tokens was reduced, and 30% trade tokens were not conducted. One of the unfortunate placements — Estonian cryptocurrency Internet Bank Polybius, which raised $32 million, but his coins fell by 24%. However, for entrepreneurs this is not too critical a factor because the money they have already collected it. Price fluctuations in the short term, they are not too concerned.

Besides, most of the ICO remain successful and the price of tokens will be multiplied due to the large amount of money in the market. Many people involved in the "Golden cryptolibrary", and because of this almost any tokens is almost guaranteed to increase after placement. It's kind of a unique situation when large masses of the population are "drugged" opportunity to get rich quick. And when this mania encompasses large masses, the ideas really come to life. Ideas become tangible, in full accordance with the thesis of the classics. Of course, entrepreneurs can't miss such a unique opportunity and tend to quickly attract investment, while the universal "obsession" is not over.

The Wall Street Journal writes that investment in ICO attracted the attention of professional investors, and ordinary citizens. The newspaper cites an example of an entrepreneur from Chicago Mike Bardi, who began to invest in cryptocurrency in the summer of 2016, and now turned your $80 000 in several million dollars.

In fact, such stories can cause tens. On Federal channels, the U.S. has repeatedly been reports about the "digital miracle" called Bitcoin, thanks to which ordinary American workers increase their savings. For example, recently on NBC talked about the 39-year-old worker from the steel plant, which has invested in bitcoins at $1600, and now they cost $20 000. Now he talks about the unique investment in cryptocurrencies and other workers at the plant. He says: "It's like buying Apple shares for 10 cents." In the same report showed the school bus driver, who also was enriched by investing a couple of thousands of dollars in cryptocurrency, and now his whole family, including grandma, is also investing in bitcoin.

In the report, CNBC talked about the increased popularity of retirement accounts linked to bitcoin (for instance, such company offers Bitcoin IRA): their earnings exceeded a million dollars a day. All this money bought bitcoins for savings for retirement.

In Russia, the mania has not yet reached such proportions as in the United States. At least, working with plants and pensioners do not tend immediately to the entire salary and pension to buy bitcoins. That's when we'll see this — I guess you can say that the price of bitcoin has reached its peak and the bubble swelled to its maximum size.

Reasonable people may assume that the growth will not last forever, and the bubble may burst just as it happened in 1999 with the shares of Internet companies, many of which have turned into garbage. By the way, it warns the Central Bank, which yesterday released a statement on cryptocurrency on the official website.

The Bank warns of the dangers of investing in cryptocurrencies, and recalls that "most of the operations with cryptocurrency is outside legal regulation of the Russian Federation and most other States."

Most importantly, the Bank of Russia officially declared that is not going to allow legal auctions of crypto currency and derivative instruments (tokens) on the territory of Russia.

Earlier, the head of the Duma Committee for financial market and Association "Russia" Anatoly Aksakov said that the state Duma may adopt a law on the regulation of cryptocurrencies in the fall. Soon this topic will discuss the ad hoc working group of the state Duma.

Anatoly Alizar


Tags: assessment , financial center , finances