Bitcoin
Spotting Scammy ICOs Before Parting With Crypto Coins In Crowdfunding
Crowdfunding has become a popular means by which businesses get funds to start a business. However, the rising popularity of bitcoins has led to a new method of crowdfunding called Initial Coin Offering (ICO) that is different to the standard financial system that the market is used to.
What is an ICO?
Before going into the details of how to identify ICO scams, it is first important to understand the concept of an ICO. It is basically the crowdfunding that we all know but the difference is that ICOs are carried out through cryptocurrency. It is currently becoming very popular because it presents a new method for individuals and companies to fund their projects.
ICOs are advantageous because they have an easier and more efficient process compared to the traditional methods of crowdfunding. ICOs last about one or two weeks and sometimes even longer. During that duration, individuals and companies get to purchase tokens issued through the crowdfunding in exchange for cryptocurrencies such as ethereum or bitcoin.
Fake ICOs
ICOs have been growing more popular especially with the surge of major digital currencies such as Bitcoin. This highlights the fact that they are more efficient and easy to use for crowdfunding purposes. Numerous ICOs were launched about a week ago and this demonstrates just how popular ICOs have become. However, this has also led to new threats such as scams despite the allegedly secure nature of blockchain technology.
Generous bonuses
Investors view very new ICO that becomes available as a potential goldmine which means it could be the next big thing. This is because some major firms such as Uber or Airbnb got to where thy currently are through crowdfunding. For this reason, most investors are after the best bonuses that they can get through crowdfunding projects.
Most of the bonuses issued through ICOs are often based on the total investment and so investors sometimes pursue bonuses that are as high as 90 percent. These bonuses are thus an incentive for investors and so some scammers want to take advantage of this by offering generous bonuses. This is one of the tell-tale signs that an ICO could be a scam. Investors should thus avoid deals that seem too good to be true.
Adequate background checks
Scammers are often clever and often times end up being as good as the real deal. This means it is difficult to tell the true ones from the fake ones. It is thus important to employ other security measures. One of those measures should include an elaborate background check of the founders of the ICO to determine whether they have a good track record.
Legitimate founders will most likely have their footprint in other key areas thus meaning they can be trusted. It would not be a good idea to invest in a crowdfunding project whose founders have no prior experience in the field that they are venturing.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Rocio Lara via Flickr
Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
Last week on Thursday, cryptocurrency experts took notice of…
Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.
Economic Outlook
Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
Additionally, the central bank indicated that three rate…
Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.
Fundamentals
Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.
According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…
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