Crypto Trading Ethics and the Anatomy of an ICO Flipper

Crypto Trading Ethics and the Anatomy of an ICO Flipper

I found myself in the WAVES slack last night, WAVES was due to be added to Bittrex on the 16th of June. Unfortunately, a decision was made by the WAVES team to postpone the launch due to ongoing withdrawal and user issues. The WAVES team had thus far been exceptionally professional and this event was just a minor setback. To my knowledge, there has yet to be a completely smooth ICO launch, but to my astonishment some of those in the chat were quite upset about it all. Even after an announcement that it will be launched on the 20th of June and that Sasha is working with all “MAJOR exchanges”. Why were they so upset? Surely waiting a few more days isn’t the end of the world. Or is it?

These people/speculators are what I like to call, ICO flippers. After the success of the Ethereum project and LISK, we are seeing a flood of money being poured into the cryptosphere. For example, on the last day of the WAVES ICO, a tsunami of Bitcoins flowed in, practically doubling the crowdfunded total. A vast majority of this money is coming from speculators. ICO flippers essentially invest in ICOs and hype it after the ICO finishes. Then upon being added to the exchanges they dump their coins, make a handsome profit, then rollover their profits to the next ICO. The question I want to address is, is this ethical?

I’m sure I won’t have to convince you that the world is full of corporate cronyism and monetary manipulation from central banks, so a dollar put into a crypto ICO is better than one put into a Wall Street hedge fund. Ethically investing in ICOs really comes down to your motives behind investing. Are you investing because you see a technology that will benefit mankind, or are you investing to make a quick buck? Obviously you could do both, in fact making money this way isn’t something you should be ashamed of. By investing in an ICO which you believe will have a positive affect on the world, you help give funds to that entrepreneur to achieve his or her goals. In other words you are helping them to succeed. In return, if they succeed, you succeed too. This is ethical crypto trading.

The other side of the coin is unethical trading. This is when a trader will trade for the sake of making a profit regardless of whether they believe that the technology will benefit humanity or not. The most blatant of these types are those profiting off scams and pyramid schemes. Less obvious are the pump and dump groups, resurrecting dead blockchains from the grave that serve no benefit to the human race, other than the small group of inside traders. ICO flippers are not as bad as these two groups because they do help fund some forward-thinking projects. What I would urge these traders to do, is to invest in ICOs that they believe will make a real impact, rather than deceiving others for the sake of profit. Pumping uninspired ICOs moves capital into the wrong hands and prevents progress.

While I am a champion of Laissez-faire, I don’t subscribe to Ayn Rand’s objectivism. We, as cryptocurrency investors and traders, are the enlightened ones, so let’s act as such. Making money in such an environment is not a bad thing, just as long it is done while holding or trading something you believe in. Obviously, I cannot tell you what to buy, as opinion is subjective. However, we have a responsibility to move funds into the correct hands in order to build a crypto community that will challenge the corrupt system as we know it. Instead of moving towards our goal in a zig-zagging motion, let’s move in a straight line.