Caveat Emptor: The Shifting Profile Of An ICO Investor

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Business and investors. These two go together like Batman and Robin, or Han Solo and Chewbacca. Where there’s money to be made, investors will place their bets.

The cryptocurrency ecosystem created an entirely new array of investment opportunities. ‘Traditional’ investors were somewhat reluctant to become involved at the beginning, however, purely because they didn’t understand crypto (and many still don’t).

But circa 2013, there was a fundamental shift in the crypto landscape as the world of crypto witnessed the birth of a new entity, one that would become indelibly associated with cryptocurrencies for years to come: the Initial Coin Offering or ICO.

ICOs quickly became the de facto weapon of choice for raising the capital needed to get a specific crypto project off the ground.

The figure of the ICO investor became a reality there and then.

Investing in crypto: the true meaning of caveat emptor

Investing in any business, crypto or not, is a risky proposition. Any fledgling investor soon learns the caveat emptor motto, and for good reason.

Buyer beware can be applied to any business or purchase, but more so when dealing with crypto products. The maxim stood as true in 2013 as it does today.

ICOs, and the world of crypto in general, have greatly evolved over time. The beginnings were somewhat murky and tarnished by some well-publicized scandals. Early crypto investors had the misguided notion that cryptocurrencies were little more than get-rich-quick schemes, and took a Wild West approach. Caveat emptor was thrown to the wind, and the outcome was financially dire for many.

But how has the figure of the crypto investor evolved over time?

The shifting profile of an ICO investor: from random to organized chaos

In the beginning, the crypto world was a melting pot where people with wildly disparate intentions cohabited. Digital money as we know it today was its infancy.

When cryptocurrencies first entered the public domain, most ‘regular’ investors did not know what to do with them. Investors were undoubtedly attracted by rumors of almost implausible gains in a short period of time. The intentions behind these rumors may not have always been honest as many early investors discovered too late. There was close to no regulation in those days, so if the money was gone, there was no recourse and no one to talk to.

The chaos that dominated the early times has now largely evolved into a less tumultuous environment and investors have wised up, too.

The ICO of today is rather different from the early forays into cryptocurrency. Tightening regulations and increased awareness have created a ‘safer’ ecosystem in which to invest and do business in a more structured and logical manner.

Many ICOs currently in operation only accept ‘accredited’ investors, for example. This accreditation takes different definitions, depending on the geographical jurisdiction where it is applied.

Conclusion

Investing takes a hardened approach to both life and business. It is your money, after all, and the amounts involved may be quite significant.

Investing in cryptocurrency takes an even more courageous ambition, and a resolute intent to risk your investment.

The figure of crypto investor has steadily evolved from the chaos of the early, confusing times, to a more discerning and resourceful entity that enjoys a greater degree of protection and safeguarding from bad investments.

But remember the axiom of business: only invest what you can afford to lose.

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