A FEW THINGS TO CONSIDER BEFORE INVESTING INTO CRYPTO
I attended DC Finance's The World of Blockchain & Cryptocurrencies event for family offices. Tim Draper spoke at this conference. He gave some very interesting advice. He told the family offices they should not be investing themselves in cryptocurrency. He encouraged everyone to invest in cryptocurrency. He said once you start investing, that encourages you to start checking the prices.
Tim said family offices should use a cryptocurrency/digital asset investment firm to invest in cryptocurrency on their behalf. Tim’s rationale is that only people working at least 70 hours per week have the time to carefully research the 2,000 worldwide cryptocurrencies to invest in.
Last week, I had a meeting with a crypto investment fund managing 100 million dollars. They previously invested in the top cryptocurrencies by largest market cap. However, they recently noticed that their investments in pre-ICOs have had a 20x multiple more than the top 15 cryptocurrencies. Therefore, their new focus will be more on pre-ICOs. This is something people outside the crypto field might not be familiar with. It seems most of the news media and even watercooler talk is about Bitcoin, Ethereum, Litecoin, etc. However, those blue chip type cryptocurrencies are already set at high prices. Therefore, it is very difficult for any of these to increase by a 30x or 40x multiple. To the contrary, if you get in on a pre-ICO at the beginning around $0.10, then many of these tokens go up to $3.00 and it is possible to make 30x and 40x multiples.
Of course, many of these pre-ICO tokens fail. You definitely have to carefully research everything you can about the company before investing. Over 95% of the pre-ICO tokens will not be around in 3 years, which is not unique to blockchain (but the same statistic for all kinds of startups).
DISCLAIMER: THIS IS NOT INVESTMENT ADVICE. THIS IS ONLY INTENDED AS GENERAL ADVICE ABOUT CRYPTOCURRENCY.