In the second half of 2017, Bitcoin ushered in explosive growth after nearly a decade of dormancy, reaching an all-time high of $19,212. This not only attracted the attention of the media, but also attracted investors who fantasized about getting rich overnight. Although the price of Bitcoin dropped significantly in the next few months compared to the highest point at the end of 2017, the price of Bitcoin remained at the same level in the first few months of 2018 due to the constant hype from the media, the big V in the currency circle, and the entry of investors. $10,000 and up.

Google Trends data shows that the popularity of "Bitcoin" reached its peak at the end of 2017 and remained so for several months. At the same time, the popularity of "digital currency" and "ICO" also reached its peak during this period. It can be said that the skyrocketing price of Bitcoin at the end of 2017 made Bitcoin a new star in the financial world, and speculators who lacked technical understanding and common sense of economics poured in one after another. The hot words, various tokens and digital currency exchanges are on the scene.

The influx of a large amount of hot money and the emergence of new coins have pushed the total market value of cryptocurrencies to a climax, exceeding $795 billion at the peak. However, as of the writing of this article, the data on Coinmarketcap shows that the total market value of global cryptocurrencies is only 183.7 billion US dollars, a drop of 77% compared to the peak period. The digital currency market is not only flooded with various tokens, but also new tokens are continuously produced through ICO. The project party uses the white paper to endow these tokens with beautiful profit fantasies to attract speculators. Every speculator firmly believes that Digital currencies will continue to grow, but there is no firm reason to support their own ideas. This financial motivation driven by greed has pushed the price of digital currencies to an unreasonable and unsustainable situation.

The wool comes from the sheep, and the fanatical speculators thought they had grasped a rope leading to wealth and freedom, and desperately climbed up, regardless of whether the end of the rope was a jackal or a tiger or a leopard.

Speculators who fantasize about getting rich throw money wildly into the currency circle, but are brutally harvested by the harvesters who really control the overall situation. Some project parties issued air coins, and then ran away, leaving a lot of chicken feathers to the harvested retail investors. Recently, speculators under the banner of rights protection have appeared continuously, such as turning OK founder Xu Mingxing to the police station, attacking OK headquarters or threatening suicide. These speculators are trying to recover their losses through brutal methods.

In fact, no matter where or in what field, the law of big fish eating small fish will never change. Retail speculators think they have mastered the rules of the game and enter the game with high ambitions, but they never expect that what awaits them is a more tragic harvest.

In the face of the soaring price of cryptocurrencies, some media in the currency circle also lost their minds. Rather than losing their minds, it is better to say that the media in the currency circle also found it profitable to whitewash reports on the big names in the currency circle. Possible projects have also appeared in the public eye grandly.

This kind of behavior has produced three bad consequences. One is to stimulate the nerves of speculative retail investors and make them more flocking; the other is to make some junk projects, whose starting point is to issue coins to collect money, grow rapidly and cause greater harm; The third is that the continuous reports on the big guys in the currency circle break the balance of the currency circle, making the entire currency circle a stage for a few people. Burst.

If speculators and the media unintentionally played the role of boosters in this harvest war, then some project parties are really and clearly doing money-making and running away. ICO is another important reason for the collapse of cryptocurrencies. ICO allows speculators to become early investors in a project. Moreover, it is difficult for ICO to receive strict supervision at present. To a large extent, it has become a sweet spot for risk lovers and scammers. cake.

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Here are a few typical ICO scams

ACCHAIN, PUYIN， & BIOLIFECHAIN
After Shenzhen Puyin Blockchain raised more than $60 million for three of its projects, the government announced a ban on ICOs and six project leaders were arrested for an “exit scam.”

CRYPTOKAMI
With the help of an anonymous development team, a newly created website, and fake comments on forums, the project attracted more than $12 million in investor funding before the project website and accounts were all shut down.

BITCONNECT
With an aggressive multi-platform marketing campaign, BCC’s market capitalization has skyrocketed, making it one of the best-performing cryptocurrencies of 2017. Following a deregistration notice from the U.K. Registrar of Companies, followed by a cease and desist order from the Texas Securities Board, the digital currency collapsed with equal speed.

But this is just the tip of the iceberg. There were more than 3,000 types of digital currencies recorded on Coinmarketcap at most, and there are only 2,080 types left, and most of them are zombie coins that are not in circulation. When retail speculators have no understanding of the digital currency project, and it is impossible to clearly understand the progress of the project, spending money to buy digital currency means extremely high risk.

Digital currency exchanges are also an important factor leading to the collapse of cryptocurrencies. The emergence of digital currency exchanges has allowed digital currency transactions to scale up, improving the convenience of digital currency transactions, and at the same time allowing more retail investors to enter the market and more funds to enter The currency circle is also more conducive to the "financing" of false projects, thus creating a bigger scam.