There's no doubt that EOS is going to be a "game changer", not only on the cryptocurrency scene but also on the way ICOs are being set up in the future. However, I'm concerned that the way this ICO is designed, it could ultimately hurt future ICOs as well as cause (short-term) losses to early investors. Let me explain.
According to http://eosscan.io, block.one raised more than 182 million dollars during the first 5 days of the ICO (that's roughly 36,5 million dollars a day) which led to a price of $0,91 per token when divided into 200 million token. Then, on July 1st (Period #1) 3,5 million dollars were raised for the next 2 million EOS Token distribution (ending with a price of $1,75 per token).
Yesterday July 2nd a massive 12,4 million dollars were thrown at block.one's hands in payment for the next 2 million EOS token batch, which led to an impressive price of $6.2 dollars per token. The price on Kraken climbed up to that figure but at 10:00 UTC, as Period #2 ended there was an abrupt dump down to $3,86 (that's a roughly 40% decrease in just three hours). I bet this behaviour will occur every day for the next 348 Periods which are lasting until the ICO ends, that is, it will increase near each Period's end and then will go down as investors take benefits.
The problem is, I don't really think this is going to be sustainable over time. I don't see people sending $12 million dollars to block.one on a daily basis for the next year. So, once the hype has passed, after a few days/weeks price is probably going down, and EOS rate on exchanges will tend to the same price which results from the amount raised at each Period's end (i.e. each day) so that both rates will match.
Of course, this is one of the smartest ICOs that has ever been desinged, as block.one ensures a daily income for a full year, while on most ICOs money changes hands on exchanges once the ICO has ended. However, in this case, a big portion of that money is going directly to their hands, as people will try to buy "cheap coins" directly from the ICO distribution page. After a few weeks, I'm afraid this could drain investors' wallets and hurt future ICOs, while making block.one extremely rich. In a week's time they have already raised almost $200,000,000 bucks, and there are still plenty of days lasting on this ICO.
Ultimately, I'm pretty sure EOS price will plummet and remain low (probably below initial ICO's price of $0,91) for a long time. It will all depend on how much money investors are willing to pay for each 2,000,000 EOS batch in the future. But once we are approaching June 1st, 2018, it will probably start to rise again, and finally fly off once this endless ICO comes to an end. The hard part is chosing the best moment to buy at "cheap" rates, whatever price that's supposed to be.
Don't get me wrong, I think this is an exciting new technology which could truly change the cryptocurrency scene in years to come. However, a more traditional approach should have been chosen in order not to hurt investors and the ICO crowdfunding approach in general. Time will tell if I'm right or wrong.
My 2 cents.
PS This is my first post. Don't be too hard please.
Excellent write!
Nice post! I hope you're right.
What is happening actually is just stupid speculation~
Absolutely. Thank you so much for your kind words!
I'm just riding this gravy train through day trading :P I agree, I don't expect the price to be too sustainable. Good opportunity for that short term though. Would have quadrupled my money had of I not sold early...