Internet Computer (ICP) was one of the most exciting projects in the cryptocurrency world at its launch in May 2021, heavily promoted as the "next generation of the internet." However, behind these promises were serious secrets and hidden truths indicating that there was more than just an innovative project. Let's dive into the details and uncover how the story began and where things fell apart.
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1. The big promise: decentralized internet
Initially, ICP was considered an innovative project built on an amazing idea aimed at transforming the internet into a completely decentralized system, away from the current dominance of companies like Google, Amazon, and Microsoft. ICP was announced as a new network utilizing advanced technology to create a "World Computer" that allows developers to create and distribute applications on the internet without the need for traditional servers or cloud.
That promise was attractive to many investors looking for a new opportunity to profit from innovative and promising technology.
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2. The rapid rise: the initial boom
When ICP was launched in May 2021, the currency saw a massive surge in its value. On the launch day, the price of ICP reached $700, making it one of the highest valued cryptocurrencies at that time. This significant rise attracted the attention of investors and created unprecedented excitement, leading many people to believe that this was the "golden opportunity" to achieve huge returns.
But the reality was very different.
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3. Liquidity manipulation: pulling the rug out from under small investors
While most small investors were buying ICP at this stage hoping for huge profits, the founding team and large investors had entered the project very early, having the opportunity to acquire the currency at very low prices before public trading began. This meant they held the largest quantity of the currency while the price was still rising.
As demand for ICP increased, the founding team and large investors began to gradually sell their stakes, leading to a significant decline in price.
The secret: After massive amounts of the currency were sold by these investors, liquidity was controlled by major parties, making it impossible for small investors to exit the market easily when the price began to decline.
Evidence: When the price began to drop from $700 to below $50 in less than a month, it became clear that most of these large investors had made huge profits while leaving small investors facing substantial losses.
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4. Misleading promotion: selling the illusion
Although ICP was considered an extremely innovative project, there was a lot of exaggeration in its promotion. The initial ads portrayed ICP as a project that would radically change the internet, prompting small investors to rush to buy the currency based on unsupported promises.
The secret: The advertisements heavily focused on ICP technology and its promises of transforming into a decentralized internet, while failing to highlight the fact that the project faced numerous technical and economic challenges that could impact its long-term sustainability.
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5. Control of liquidity: how it affected the market?
Liquidity was one of the biggest problems with ICP. Despite the significant rise in its value initially, liquidity on the exchanges was extremely low, making it difficult for small investors to sell their coins when the price started to drop.
The secret: Dfinity, the founding team, had almost complete control over the liquidity of ICP, allowing them to manage buying and selling movements. This enabled them to manipulate prices to maintain their value in the short term while small investors struggled to act.
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6. The rapid collapse: devastating losses for investors
In less than a month after the launch, the price of ICP began to collapse significantly. From $700, the price fell to below $50, causing massive losses for investors who entered the market initially.
The secret: Once the large investors started selling their massive stakes, the price plummeted dramatically. This left many small investors facing severe losses, while the founding team and large investors had already exited the market, making huge profits.
The most striking thing is that those who invested in ICP for $700 when the price was at its peak now own only the equivalent of $5 from their investments. This clearly illustrates the massive collapse the currency experienced and how severe the losses were for small investors who entered the market late.
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In summary:
Internet Computer (ICP) is a glaring example of how the excitement of new investors and exaggerated promotion can be exploited to attract funds, while the founding team and large investors remain in a position to reap profits while leaving small investors at a loss. Ultimately, ICP may be an innovative project, but the tactics used in its marketing and launch made it an example of how to pull the rug out from under small investors and entrap them in significant losses.
Before investing in any cryptocurrency, make sure to understand its background well, and look for clues that may indicate liquidity manipulation or misleading promotion.
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