The crypto currency ICO craze smells a whole lot like the dot com bubble
by: Ethan Huff
NaturalNews.com
Sunday, August 06, 2017
They’re the wave of the future for companies trying to raise capital quickly using digital cryptocurrency rather than traditional fiat. But initial coin offerings, also known as ICOs, are becoming so popular so fast that the concept is starting to look a whole lot like the dot com bubble of the late 1990s, some experts warn – and we all know how that turned out.
Over the past several years, ICOs have seen wild growth in many economic sectors because they’re unregulated, for one. This means that startup companies have a much smoother, red tape-less entry into the capital-raising phase of their growth and development. ICOs also function in a decentralized way, allowing companies to avoid the many pitfalls of central banking control.
With the exception of new rules and guidelines recently put forth by the U.S. Securities and Exchange Commission (SEC) that at least partially pull ICOs into the web of direct oversight by federal regulators, ICOs are the “wild west” of cryptocurrency capital ventures. This can be both a good and a bad thing – the bad being the way ICOs tend to attract greedy speculators like bees to honey.
While ICOs have the potential to allow for new economic growth with minimal barriers, many people are hopping on board the ICO train without even knowing what it is they’re getting themselves into. Just this year, there have been nearly 1,000 new cryptocurrency “coins” that have emerged via ICOs, and investors all around the world are ditching their day jobs in the hopes of striking it rich.
In cities as varied as New York, Hong Kong, and London, investors – some boasting seven-figure salaries – are calling it quits and throwing everything they have into ICOs. Many of them believe that it’s the best chance they have to ride the wave towards the next technology-enabled “revolution” in capital ventures.
“Loosely akin to IPOs, ICOs have raised millions from investors hoping to get in early on the next Bitcoin or ether, and their unchecked growth over the past year is such that they’ve drawn comparisons to the first ill-fated dot-com boom,” warns Lulu Yilun Chen, writing for Bloomberg.
“Yet with stratospheric bonuses largely a thing of the past, the allure of an incandescent new arena far from financial red-tape has proven irresistible to some.”
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