Cryptsy is still mentioned in crypto communities as a ghost alert on an old highway that is long since abandoned. It reminds people that even the good opportunities at their early stages can be as bright as devastating. That friction is the core of crypto presales. So what is a crypto presale? It is a seed round and a new project issues its tokens before it is listed on the public markets. Investors buy in first. Usually at a lower price. They, in their turn, assume greater uncertainty. It is not a dice throw but it is startup pitching. Explore price predictions and find more on Cryptsy.
Consider a group that has an idea and a strategy. They want to establish a platform, deploy a protocol or drive an application using blockchain technology. They issue tokens prior to the full acknowledgment of the product to generate funds. That’s the presale. Phases are typical in selling statements. Early rounds cost less. Later rounds cost more. Buyers are forced forward in each step. Limited allocations. Countdown timers. Bonus incentives. One feels like they are being given backstage passes before the concert is announced. Its promise is simple, the initial investments may be turned into higher returns later.
Why should anybody jump before long? Because first mover has got real potential. In the event that the project goes live following the launch, buyers of the project pay a discounted price to those who bought the tokens at the pre-sale stage. Out of that difference in price it is possible to make a profit. Stories of the early investors to multiply their fortunes spread like campfire stories. They spark curiosity. They fuel ambition. But there’s another side. Some presales underperform. Some tokens are sold below the time of its sale. The Hype can be eliminated when real trading is performed. Markets are ruthless. They are delivery-oriented, not dream-oriented.
Risk sits front and center. Numerous presale developments are being built. Features may be incomplete. There can be pending joint ventures. Timelines can slip. In weaker cases the teams dissolve following fundraising. It is the dark side that no one wants to discuss. It is due to this that one should go into the details. Look through the whitepaper. Check token distribution. Heavy distribution to short lock-up insiders could lead to heavy sales in future. When the team is transparent, confidence is achieved. Silence erodes it.
The choices taken are based on emotion rather than being logical in the majority of situations. It possesses a small voice of a fear of missing out that it is your golden ticket. The noise is augmented by the social media. “Last chance.” “Final round.” The phrases mentioned force people to act fast. Slow down instead. Ask clear questions. Do you know the object of the project? Are you putting at risk what you are putting in? Presales are high-risk plays. They can reward forbearance, and recompense heedlessness. Do not treat as sure things, treat as venture bets. Time can be prevented but there is no equivalent to research and training and time.