Why Selling Tokens Right After ICO Is a Bad Idea.

People who participate in #ICO, want not only to support the project, but also hope to get profit. Some of them hold tokens as long-term investment, some rush to the exchanges right after ending of ICO to sell as soon as possible and get at least some part of money they have spent back. As you can understand from the title of this post, the last way is not very reasonable. Let’s see why.

There are several reasons why people may sell their tokens right after ICO:

  • With the intention to rebuy it later at lower price. They sell large amounts of tokens, it creates panic, prices fall — and they buy tokens once again, but cheaper than they have sold it, getting profit from the difference between prices;
  • Some bad news about project has come. In this case even unfounded rumours may cause panic at the exchanges. There is a big competition at the market of ICO now, so projects sometimes resort to dishonest methods, spreading false news about its rivals. It’s better to check doubtful information, that don’t have any reliable source;
  • People who participated in a bounty program and received tokens for free.They didn’t pay for anything, so in any case they will receive profit;
  • If the project during ICO offers a lot of bonuses, airdropping tokens, rewards and etc. — simply put, when there are a lot of tokens, that are easy to get. Token holders then don’t value them much and hurry to sell, receiving quick profit.
  • Because people are afraid that price of a token will fall and want to insure themselves against losses.

And the last one is the most interesting. Some people are so afraid to lose money later, that they are ready to lose money now by selling tokens even cheaper that they have bought it. In this case, what is the point of participating in ICO? If you are not ready for any fluctuations on the market, then don’t invest — investments are always risky. But if you have decided to make investment — then at least try to make the most of it — don’t just sell tokens at the first sign of instability. The point is to sell at a higher price than you have bought — and not vice versa.

The most important decision you make before participating in ICO is choosing a project — if you have chosen one in which future you believe, you are sure that it will continue to work and develop after ending of ICO, so after some time the price of tokens will become stable. If it is working successfully and have plan for the future development — there is no reason why its tokens may depreciate. You should learn everything about project before participating in ICO: how many tokens are allocated for bounty program, if there will be additional issue of tokens, whether free bonuses are not too high. If project has reasonable distribution of tokens plus not less important characteristics, such as professional team, clearly-stated roadmap, workable product, then you don’t need to worry about token price fluctuations.

Source: Why Selling Tokens Right After ICO Is a Bad Idea – Bonpay – Medium