First off let me start by saying that I'm using ICO as a broad term encompassing all token sales.

With that out of the way let me get down to it.

I hear it all the time... (insert project name here)'s token is down 53% from the ICO price one week after it was listed on an exchange! Why would anyone invest in an ICO when we can just get the token cheap on an exchange?

It seems to be a good question when you read it, I mean, we see it all the time. MANY projects do decently well during their token sale, only to drop as soon as the tokens hit the open market. Why then should any of us invest during the token sale? Here are the reasons that come to mind for me.

1. It's good for the industry. The more people investing in ICO's the quicker the cryptocurrency industry, as a whole, advances. Think back to last years rally. EVERYONE was participating in token sales of some kind. New companies were moving into the cryptospace en masse. I do have to point out that there were also a LARGE number of scam sales popping up at the time, but the fact remains -- the industry was booming and the markets reflected that. Maybe this isn't a good enough reason, so let's dig deeper.

2. Volume. The limits to how many tokens you may buy during any token sale are MUCH MUCH greater than the volume available at those terrible exchange prices after listing. Think of it like this. Sally buys 1 Million 'blabla' tokens during the token sale for $0.10 each. As soon as those tokens hit an exchange the price plummets to $0.05 -- Bob buys all of the 1000 tokens available at the $.05 price. Over the next few months the price gradually increases, until finally the price surpasses the token sale price and hits $0.11 -- Sally's tokens are now worth $10k more then she paid. Bob's tokens are now worth $60 more than what he paid -- so while Bob's % of profit is better, in actual $ terms, Sally is MUCH better off. Sally didn't have any opportunity to buy 1 Million tokens at $.05 even though the 'price' of the tokens were at $0.05 (because there were only 1000 tokens sold at that price). So who made more money? Neither. Here's why...

3. You Lose or Profit if you SELL. There is NO reason to get worked up about a token's price immediately after a token sale -- UNLESS YOU SELL Immediately, but why would you? You truly believed in the project when you invested -- what changed? Nothing!!! That brings me to the next point.

4. NOTHING HAS CHANGED! The token sale just ended, and now the token is listed on an exchange before any of the dates on the roadmap. The project hasn't had time to mature and make developments and reach milestones on their roadmap. The product isn't finished and the project hasn't started profiting yet. Why would the price increase with absolutely no reason? If you're looking to make a quick dollar -- maybe you should focus on trading instead of INVESTING (and know the difference).


All this being said -- I offer the following advice:
"Don't invest in ICOs to make quick money. Do you research and only invest in ICOs if you 100% truly believe in a project, and the potential for profit -- EVERY good investment has a significant amount of risk involved. If you plan to invest in a token sale, let the team do their job and develop the project before you complain that you aren't driving a lambo after investing only $100 -- if investing was that easy EVERYONE would be a millionaire/billionaire --- if EVERYONE is a millionaire/billionaire, then no-one is.



That's a few reasons I could come up with off the top of my head -- anyone have any thoughts, arguments, or additions? Hopefully we can get a good list of pro's and con's going here -- so we can share this thread the next time we're asked "Why should someone invest in an ICO?"