Crowdestate – still overrun by investors

While some other P2P portals have to work to get more investors to come on board, then Crowdestate is struggling with a different issue – there is just too much money to be used and not enough projects available. While this is also not a good problem to have for a site – if investors get too frustrated they will leave the site since they cannot employ their capital, then it’s great fuel for potential growth.

However, from the investor’s point of view it is rather annoying. Having enough money is good in the sense that projects get filled – it hardly ever happens that your money gets booked and then returned later (having earned no interest while booked), and if a project does fail there are some fundamental reasons why investors do not find it attractive.

The downside of having that much money however is that it’s quite impossible to actually get into most projects by hand. The current setup is that autoinvest has priority over manual investments, and autoinvest is not capped the same way pre-booking is (you can invest however much you want via autoinvest).

This means that most projects that are smaller than 500K are pretty much set to be filled by autoinvest. More people will start using the strategy that I do – when I see a project that I like I temporarily turn on autoinvest – and there will be even less of a chance to manage to invest by hand. In that sense it’s good – no more wasted time waiting by the computer and clicking refresh and cursing when the page refused to load.

So, there isn’t that much reason to log on when projects go live anymore. Another reason to log on could be the secondary market, but within about a week of development bots were built to trade on the secondary market, so it’s impossible to buy anything manually (unless the returns are pretty low) or for some reason all the people who run bots run out of money (which will probably not happen). So the secondary market did provide an easier way to exit, but the purchasing function is unusable for a regular investor.

All in all this means, that there isn’t much to do. If you see a project the best way to manage to invest is to set up autoinvest (and remember to turn it off later), and go enjoy the warm summer weather. Definitely a much more passive and less time restricted investment than it used to be. Now, if there were a few more projects :)

Crowdestate now has a secondary market – good or no?

It’s definitely interesting that after years of hoping and waiting for Crowdestate to open a secondary market, there are interestingly a few downsides to it that are tied to the current situation on site and the economic situation.

The good

It’s definitely good to have an option to sell investments. Due to a large amount of projects having a ~2year deadline, then the flexibility of being able to sell, means more people would probably have the courage to lock in their money into projects.

Also, the secondary market will be an interesting way to play around with increasing your earnings, people can be quite emotional when buying, especially since with CE projects the fear of missing out is rather big, so people might want to buy into deals if they miss it.

The bad

I think the biggest issue currently is the fact that adding a secondary market is likely to make it even more difficult to get into projects. People would be motivated to make multiple bids (automatic bids) through more than one account and then sell one of the pieces. I know that I had this idea, so I’m assuming others did as well.

This means that there will likely be even more autobidders active, which means that even less of chance to get into projects manually. One of the last projects listed was pretty much completely filled with automatic bids, meaning manual access was impossible.

While playing around like this means potential for better income (essentially making profits from reselling pieces), then I’m seeing a lot more disappointed investors who aren’t able to participate in projects. But who knows, maybe they’d be happy to have the chance to buy from the secondary market?

Overall, the best fix for this would be to have more projects listed to decrease the competition for investors to get into projects, but currently it seems like there isn’t much in the pipeline, and I’m unlikely to increase the amount I place per investment due to wishing to keep some level of diversification (currently capped at 500 per project) and therefore like most other p2p investors I’m also currently moving any free money to Mintos to take advantage of the cashback offers.