German Investors Lost Up To 90% On ICO

Dawid Paluch
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WirtschaftsWoche, German financial magazine analyzed token price changes of Initial Coin Offering (ICO) from the beginning to early September. The results of this report are devastating: Startups lost up to 90% of their previous value.

Private investors gave their money for ICO because they thought it would bring them millions. As it turned out, startupers got a lot less money, than they brought to the table. According to the magazine, German startup coins lost almost 90% of their initial price. Even Bitcoin (BTC) or Ethereum (ETH) lost less at the end of 2017 than German ICO’s.

ICO? Not a good idea in Germany

WirtschaftsWoche has identified only 8 companies completing an ICO, with headquarters registered in Germany. The others left the country. For example, Naga, a financial group listed on Frankfurt Stock Exchange, is owned by Naga Development Association Ltd. with head office in Belize. There are many others Startups, like Naga.

Only two token publishers managed to stabilize their coin value: Wysker, an app for online shopping and Neufund, the financing platform. Other five Startups lost between 40 and 92 %. The last one is RedBux, a project from the adult entertainment industry. They finished their ICO in may 2018.

Caution advised

German investors are careful if it comes to ICO. They still prefer IPO (Initial Public Offering) for raising funds. According to Bitcom’s report from last summer, only 3% of German startups want to collect capital with token offering.

We informed you many times about pros and cons of ICO. Sure, Initial Coin Offering could be a great way of raising funds, but it’s not the perfect solution. At least, not yet. If you collect money from unknown sources, you may be a victim of a hacker. Another problem is that you gather capital in cryptocurrency. It can be difficult to exchange it to fiat, because of all the fluctuations.

There’s still a problem of law regulations. In most of the countries, ICO is still illegal.

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