Comparative analysis of ICO and IPO procedures

David Kemp

Investors often face a difficult question-where to send their money? Some pay attention to the stock market (IPO), others – to cryptocurrencies and blockchain (ICO). Let's compare both of these directions and try to determine what is best for the investor.

What is more profitable: ICO or IPO

If we talk about the possibilities of capital multiplication, the ICO is the undisputed leader. So, tokens Spectrecoin for just over a year managed to bring its owners more than 325 thousand percent profit! After the ICO, holders of Ethereum coins were able to fix 320 thousand percent of profits, and NEO – 397 thousand percent. In the latter case, however, they had to wait more than two years.

It is easy to see that the profit from participating in the ICO can vary in the hundreds of thousands of percent. This applies not only to the well-known cryptocurrency, but also to those who are in the shadows – Populous, Neblio and Ark. On average, during the year the initial placement of tokens allows you to make a profit of more than 1000%.

Securities in the stock market can not boast of such returns. They even 20-30% per annum is a good profitability, and 70% - a real success. Full return on investment for 5 years is considered to be the norm. You can read more about the initial public offering in the article: "What is an IPO?".

Comparison of ICO and IPO by many indicators

  • Real product. ICO investors often does not know where his money will be spent. Usually companies give vague promises and bright words. Even the presence of a blank product is a very rare case. In the stock market, companies already have finished products. The investor can assess its features and prospects.
  • Provided guarantees. If the cryptocurrency market does not recognize the token, then after its initial placement, the value of the asset will begin to fall sharply. It is almost impossible to sell it on the bear market immediately after the ICO launch. In addition, the legislation does not protect against such situations. Therefore, most likely, it would not be possible to get the funds back. If the company goes bankrupt, its shareholders have the right to receive part of the property. They can even defend their interests in court. By this indicator, the IPO is more profitable.
  • Swindlers. The sale of tokens opens up wide opportunities for various scammers. In turn, stock markets have existed for a long time, their activities are regulated by law, many hidden problems and risks have been sorted out. When conducting an IPO, the company must be registered, issue a license and conduct fully legal activities. There are no such requirements for ICO.

It is impossible to say for sure what is better for the investor: ICO or IPO. Those who are inclined to risk for the sake of superprofits, choose investments in cryptocurrencies. Investors who value reliability and confidence prefer stocks. You can choose the "Golden mean", and send part of the assets in coins, part – in securities. Why not try yourself in this direction? You can start investing in cryptocurrency with just a few dollars!