Why Overwhelming Data Leads to Bad Investment Decisions

Kirill Shilov
Apr 16, 2018 · 7 min read

Thanks to the teams behind Howtotoken and CoinSchedule for creating this article. Do you hesitate before every investment, never sending your ETH as you watch the ICO countdown tick down to zero? It’s true that many of the early ICOs were extremely successful; combine that with a currently flooded market and one can easily become distraught when thinking about future investments. With increasing news of scams and ICO failures, it may feel like it’s time to call it quits. Don’t. The reality is that with the proper research, it should be clear to see that now is the time to actually double down and dig in for large profits.

How did we get here?

We all remember the proclaimed heyday of ICOs, and getting caught up looking at past data can cause more grief than insight. It is true that some of the early ICOs were immense and have experienced intense ROI over time, and these early successes caused a huge boom in the market; once the terms “cryptocurrency” and “blockchain” started hitting news networks, it spread like wildfire. Anyone who was investing in ICOs at that time certainly saw a pleasant boost to their portfolio. Everyone was talking about it, from local news stations to blogs, and I’m sure we all had that coworker or friend who insisted that we “invest in crypto before it gets too popular.”

With this boom in popularity came a heavy increase in ICO funding, and from 2016 to 2017 we saw a massive increase in the number of launched ICOs. With so much money being thrown around, it is obvious to see (albeit in hindsight) that the market was primed for scams.

Billions of dollars being poured into any industry over a short period of time is sure to draw in the nefarious types who are looking to make easy money. ICOs were new, exciting, and everyone had the dream that they could get funded. For some companies, all it took was a hastily thrown together white paper, a supposed list of developers, and a shiny webpage before they launched their tokens, raking in copious amounts of money.

Unfortunately whether because of bad luck, greed, or just bad ideas, according to Fortune.com, nearly half of all of ICOs launched in 2017 have failed. Some of the failed ICOs were certainly exit schemes, but others just faded into nonexistence; the money they had raised faded away with them.

As more of these failures started to flood the market, and a few large scams hit the news networks, it split the market in two.

One side was the investors, who were spooked by the news and started pulling their funds out.

The other side was people pouring more and more money in because they worried that they’d missed out. They believed every hype tweet, every snazzy promo video, and they convinced themselves that every investment was “going to the moon.”

As the market became more volatile, governments began to get involved in an attempt to implement restrictions and regulations as quickly as possible.

Did government regulations save the ICO culture? This is up for debate, but no matter what side of the argument you are on, it is fair to say that it certainly applied the brakes on a possible runaway situation. As things temporarily slowed down, it gave the market a chance to start implementing heavy self-regulation, and it gave investors a chance to reevaluate how to properly investigate an ICO.

Many people got burned in this runaway market, while several others made a ton of money. Investing was no longer quick and easy because the number of potential investments kept increasing. Hundreds of ICOs were being launched, making it harder and harder to research each new opportunity appropriately; thus leading us to today’s market.

Modern investing in a volatile market

Maybe you feel like you’ve missed out, that with the current flooded market you will only lose money by investing in ICOs. Let there be no delusions about this, the 2018 ICO market should be approached with heavy caution.

You read that correctly: if you want to invest in the ICO market from here on out, you need to be smart. Seeking out expert opinions, utilizing a well-rounded risk management strategy, and frequenting ICO platforms are all key ways in making sure that your investments are sound and logical.

As more investors get burned by fraudulent or failing ICOs, they may be reluctant to enter the market. Because of this the market will be thirsty, and more intelligent investors can reap the benefits of their extensive research.

A few voices in the crowd

It seems like everyone is an ICO, blockchain, or crypto expert these days. In the fray of all these voices, “expert tweets,” and “consultants,” it can be hard to find the valuable individuals who perpetuate valuable opinions. Twitter is an easy place to harvest information because it offers quick thoughts on complicated topics, and is moderately verifiable when researching posting history. Adding these ten blockchain experts to your Twitter feed is a great start, but knowing how to find experts on your own is more important.

Here are a few tips to help validate that “expert” opinion you may have stumbled across:

  • Post history — How long have they been in the public sphere? Do they have a long history of posts (preferably pre-2017, when the bandwagon for cryptocurrency began), and are they obviously biased towards specific companies/agendas?
  • Work history — What field are they in? Have they consulted on any ICOs, been involved with blockchain development, or even any startups in general?
  • Google — Search their name and also search it with a few keywords, such as “trustworthy,” “scandal,” or “bias.” This should bring up any articles/forums that may offer diverse opinions about this “expert.”

Planning with risk management in mind

Create a plan and follow it. Trust the information gathered more than the hype around a specific ICO. Buying after the ICO, but before the token has gone up too much in value, is an easy way to safely invest since the company will be gaining market traction at this point. But if you want to invest during or before an ICO, make sure the bonuses aren’t too far fetched. A company that gives away a drastic number of tokens in the presale might not believe in their own success.

Another way to reduce risk is to invest through a fund, trusting in them to choose the right ICOs for you. Double check their portfolio to make sure that you agree with their past and current investments, and ask them for ROI proof. If you don’t want to go through a fund, you still may want to split your money between a variety of projects; just make sure you don’t invest in competing ICOs.

An easy way to check project categories, and more, is using an ICO platform to filter live and future ICOs.

Using ICO platforms for easy information

Gathering all of the information needed to properly evaluate an ICO can be tedious and time consuming. You have to visit their website, source the whitepaper, search social media for their development team, search the discussion forums, and so on. Using ICO platforms, however, can make this much easier because most of the work is done for you and you can just click on the links to get the information. Some platforms even offer other uses, like ICO ratings, opinions, and filters.

Filtering results is simple on CoinSchedule; whether by targeted market, launching platform, or funded percentage. Aside from filtering results, there is a plethora of information on CoinSchedule about the ICO, such as links to white papers, team member information, Bitcointalk forum links, and more. ICOs that are missing a lot of this information are typically rated lower on the CoinSchedule Trust Score.

The CoinSchedule Trust Score isn’t intended to declare whether an ICO is fraudulent or not. It is instead an algorithm that is based on the amount of information provided by the ICO in question, and the quality of that information. Investors should always do their own research on top of that provided by websites like CoinSchedule.

Researched and well-organized data can provide insights, and an easy way to access such data is to visit the CoinSchedule ICO stats page and look at past successful ICOs. Visiting these successful ICO webpages can provide valuable insights into what a well-designed ICO looks like. Another simple tip is to check out the founding team and the developmental team for an ICO through the ICO’s CoinSchedule page. Double check their social media profiles, investigate the previous ICOs they’ve been involved in, and verify that they can actually accomplish what they are setting out to do.


Compile your list of trustable experts and follow their lead on ICOs instead of trusting the hype trains that will usually lead you astray. There is a copious amount of data available on ICOs in general, so you shouldn’t have a hard time finding the relevant information for you.

Being able to understand this data, whether through filters or personal vetting processes, can help to distill the useful information needed to make intelligent investments. Only through the utilization of all of these methods can you be as informed as possible, and in the current ICO market, an informed investor has a far better chance of higher ROIs.

About the author:

Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.