Internet Capital Markets: An Investor’s Guide

Blockchain and crypto market have unimaginably revolutionized how money is invested, raised and distributed. In the past, there used to be circuitous paths full of red tape if someone wanted to start their own business. Nowadays you are just one social media post away from initiating a startup. Internet Capital Market is a name given to digital assets that enable anyone not only to invest money but also raise capital for different purposes.

What Hampers a Startup in Traditional Markets

Traditionally, if you want to launch a business, you need to convince some venture capitalist to inject capital and deploy enough money to provide your startup with a head start. Even if you succeed in doing so, the progress is bound to remain slow because you are in a market that is replete with cut-throat competition and controlled by laws and regulations that limit your free decision making.

Moreover, there are quite a few situations when you are altogether prohibited from embarking on any business adventure. Such situations include your not being an accredited investor. It might be due to lack of any credible precedence as a means to prove that you have some financial acumen. You might also not be allowed to launch a startup if you have not been staying in a country for a stipulated period. In addition, taxation policies may be too brutal to let you even think of starting, let alone practically do it.

What Internet Capital Market Is

Internet Capital Market (ICM) is the way forward if you feel discouraged by the obstacles mentioned. You do not need the title of being a special investor, or any special connection with a venture capitalist to launch a startup. ICMs let investors use blockchain, and in this way, make investment and fund-raising easier and quicker. Bots and artificial intelligence have freed the prospective investors and fundraisers from the complications of coding.

For this purpose, there are specialized ICM platforms that that take care of the whole process in an automated manner. The project designers issue a token as a digital asset to deploy their capital and attract money from investors. They issue a social media post about the launch. Subsequently, a bot brings the token to life and defines a dynamic pricing model which is based on a bonding curve. The bonding curve is a term used in the crypto industry to refer to the demand and supply relationship of the tokens in terms of their pricing and distribution.

The ICM Tokens

As far as the ICM tokens are concerned, they are the digital assets that let you participate in a project at its initial stages. The project designers sometimes let early investors give opinions as to how the project should eventually progress and evolve. There are some features available exclusively for early investors. Many new projects even offer a part of the future earnings as an incentive if investors inject substantial capital.

But there is a catch. In traditional markets, you get some legal ownership in black and white when you buy stocks and shares. What you get in the Internet Capital Market is decided by on-chain coding. The community of the project shapes the content and amount of your token shares.

Advantages of ICM Tokens

There are many advantages that make ICM tokens a great buy for an investor. The first and foremost merit, as has been hinted before, is that one need not be an accredited investor to start or participate in the project. Anyone with a Web3 wallet and a good internet connection is entitled to benefit from what ICM tokens have to offer. Web3 wallets are essential to navigate the world of decentralized finance because they serve as gateways to interact with blockchain networks and manage cryptocurrencies.

The second benefit offered by ICM tokens is that they can be traded any day at any time. Their 24/7 trading availability makes them highly attractive when contrasted with the conventional markets where investors have to wait for the trading to open. ICM tokens are on the blockchain that is always open.

Additionally, projects do not have to wait for weeks and months for funds to arrive. Immediately after a tweet or a post on Telegram, the project comes live, and fundraising begins. Community gets active and investors pour in capital to get the project going.

Potential for growth is unlimited in Internet Capital Market tokens. Social media content can go viral with amazing ease. There are various tokens that captured public’s attention in a jiffy. Many of them are meme tokens with some novel ideas, a political figure, or a cause behind them. Such is the popularity of cryptocurrency in the modern world.

Risks Involved in ICM Tokens

Although this asset class seems ideal on account of all the above-mentioned advantages, there are certain pitfalls that make ICMs and resultant tokens subject to vigorous criticism by the crypto analysts as well as the general public.

Although the imposition of restrictions and regulations can be a hurdle in the way of a startup, complete absence of regulation can be harmful as well. A bird’s eye view of the crypto market reveals that there are as frequent rug pulls happening as the launching events themselves. You need to be wary and do proper research before investing in any ICM token.

Fundamental and technical indicators do not control new tokens as effectively as they control some well-established crypto tokens and coins. Therefore, a dump or a pump can arrive out of nowhere in particular and catch you off guard. The extreme volatility makes ICM tokens a bit scary.

Since most of the ICM tokens are stored on hot wallets, they are prone to hacking attacks and other fraudulent activities. Sometimes, new projects can lack proper coding in smart contracts, inviting bugs and exploits.

Bottom Line

ICM tokens have provided an opening for almost everyone to launch a startup. They offer many advantages but also come with certain risks. The investors in the crypto market are always supposed to do proper research before trading.