After all the hysteria lately regarding ICO's, and stories of great profits being made, I thought I'd look a little more in to them.
I discovered many of the upcoming ICO's are listed on the HitBTC exchange before they become available to the public at large.
They are not the actual tokens themselves, they are IOU's for the tokens. How HitBTC actually does this is unknown to me, but they are actively bought and sold, purely on speculation.
Looking at the some of the numbers, you need to be very careful. Many of the exchange rates being asked for, way exceed the actual price that the tokens will be, when the sale goes live.
As an example, the new ICO ADEx (ADX) is currently selling on HitBTC for .01888ADX/ETH. The token sale itself will be selling the tokens at different rates, beginning on day 1 with a 30% bonus rate of 1170ADX/ETH, an exchange rate of 0.0008547. The first week bonus is set at a 15% bonus rate of 1035ADX/ETH, which calculates to 0.00096618. The final rate is 900ADX/ETH, which works out at 0.001111.
Even at the "expensive" rate of 0.0011, the Token sale itself will still be 33% cheaper than buying presently on HitBTC.
If you REALLY want some, and don't mind paying a 33% premium, then that's your call. But be aware, that just because they are available as an IOU early, doesn't mean you are getting them cheap, and that they will be worth more later.
Beware of the Trollbox on HitBTC, everyone will tell you to buy what they are holding to increase the value, it is after all, a trollbox, take no advice!
Another annoyance I discovered on HitBTC is their use of bots automatically buying and selling. I was trying to sell some Bytecoin (BCN), and everytime I placed a sell order, it would automatically place it's own sell order at 1 point less, in 100 lots, then another point lower at 200 points, and repeat, over and over. Frustrating!!
All in all, I can say my experience at HitBTC has not been a rewarding one. Emergency use only!
Take care out there, it's still the wild west, with plenty of snake oil salesman happy to take your money.
Peace.
Andy
Thank you for the advice !
I was about to buy some PRG tokens there, because it's 5 times cheaper than the ICO's price...
What do you mean by an IOU ?
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