It is like an Initial Public Offering of a company on the stock exchange. An ICO is the initial offering of a coin or token to the public at an agreed to price.
Once the coin or token is traded on an exchange, then the open market decides the price of the coin or token.
The agreed to price of an ICO is usually at a steep discount to what it is expected to trade at on the open market after the dust settles. Any initial (ICO) investor who sells below the ICO price, sells at a loss. This does not mean that the ICO price is the bottom price, but it does put an initial floor on the price.
Typically ICO investors sells all or a good portion of their position when the coin or token is traded on an exchange. This allows them to lock in a profit. This also allows other investors to buy the coin or token.
As an example, I have been watching the Tenx Pay token which began trading on Bittrex on Friday, 7 July 2017. The ICO price was around $0.71 USD. It opened around $9 USD on Friday. And has since traded as low as $0.86 USD in the last 24 hours.
I see. Thanks for that :) It makes complete sense now too! Is it basically the original value of the a currency?
It is like an Initial Public Offering of a company on the stock exchange. An ICO is the initial offering of a coin or token to the public at an agreed to price.
Once the coin or token is traded on an exchange, then the open market decides the price of the coin or token.
The agreed to price of an ICO is usually at a steep discount to what it is expected to trade at on the open market after the dust settles. Any initial (ICO) investor who sells below the ICO price, sells at a loss. This does not mean that the ICO price is the bottom price, but it does put an initial floor on the price.
Typically ICO investors sells all or a good portion of their position when the coin or token is traded on an exchange. This allows them to lock in a profit. This also allows other investors to buy the coin or token.
As an example, I have been watching the Tenx Pay token which began trading on Bittrex on Friday, 7 July 2017. The ICO price was around $0.71 USD. It opened around $9 USD on Friday. And has since traded as low as $0.86 USD in the last 24 hours.
I hope that helps.
Mike