“So when will this bubble burst?
Despite the issues outlined above, the ICO craze currently looks and feels like a bubble. Tiny, unknown startups which barely have a functional product are raising tens of millions of dollars within hours. By amassing big amounts of ETH, which (typically) stays outside the market for a while, every ICO is driving the price of ETH upwards. And the price of ETH is already up some 3500% compared to last year.
Here’s how this may look from one user’s perspective. Say you bought 10 ETH in 2016 for a meager hundred bucks. Today, your 10 ETH are worth around $3,500. But say that instead of doing nothing with your ETH, you invested half of it in the Gnosis ICO this April. The price of GNO tokens more than doubled within hours of trading. If you sold those for ETH right away, you’d have roughly 15 ETH, which today would be worth $5,250. This scenario, while theoretical, isn’t uncommon; in fact, with the growth Ethereum has experienced in the last year, gains such as these were easy to achieve.
Sounds crazy? A little bit like building a Jenga tower? That’s because it is. There are currently few people who think this kind of growth is sustainable; and many point out that some sort of correction is necessary.
Charles Hayter, CEO of CryptoCompare, told Mashable via email that some of the ICO valuations we’re seeing are “removed from reality and certainly don’t include a realistic assessment of probability of failure.””
Via Mashable – read full article here: http://ow.ly/WqoV30eyGiI