Who In The World Would Do An ICO Today?

2017-2018 were hard on ICOs 

This post is also available in: , Who In The World Would Do An ICO Today?, Criptomonedas e ICOs, Criptomonedas e ICOsEspañol (Spanish)

In the first quarter of 2018, reports indicated that the collective amount raised by ICOs exceeded $6 billion. Fast forward to 2019, the number has reduced to a meager $118 million during the same period. Could this be the end of ICOs? And is there a future for cryptocurrencies and blockchain projects that depend on ICOs for funding?

2017-2018 were hard on ICOs 

The first ICO was launched in 2013 by a company called MasterCoin. Since then, ICOs have increased in popularity as a source of funding. By 2017, more than 800 ICOs were launched raising more than $6.2 billion in the process according to data from ICO Data.  ICOs were so successful in 2017 that they made up about 30 percent of all seed funding for startups. A year later, the ICO space grew even further. 

Fast forward to 2018, 4 billion was raised through ICOs and for the most part, ICOs have seen a very positive change in how blockchain startups conduct crowdfunding. The cost of raising capital through an ICO, when compared to traditional methods, is significantly lower. 

However, over the years, the insane success stories of several ICOs not to mention the ease with which a company can launch its own ICO have also attracted the wrong crowd. Even in 2019, fraudulent ICO projects make up a huge percentage of ICOs. 

ICO scams have become so prevalent that a 2018 study showed that over 80 percent of ICOs in 2017 were all scams. The prevalence of scams among ICOs plus the volatile price of bitcoin has prompted the likes of Bill Harris, founding CEO of PayPal, to warn people about bitcoin as it is a “scam.”

Yet blockchain persists

Apart from the crushing regulatory pressure and the scammers muddying the waters, the cryptocurrency market has also been going through a devastating bear trend for the better part of 2018. As a result, a paralyzing stillness is still present among many investors leading to a slow down of the ICO market. 

In the meantime, the conversation has moved past whether blockchain technology is worthy to major corporations conducting experiments to come up with practical solutions using blockchain technology. For example, Amazon, Oracle, and IBM are offering enterprise-grade blockchain solutions at the moment.

To further support these trends, a Deloitte survey revealed that blockchain’s relevance within organizations has increased by 10 percent in 2019 compared to 2018. About 86 percent of the respondents agree that blockchain technology is scalable and will achieve mainstream adoption.

Gold and crypto are also high right now

While talking to CNN Business, Michael Novogratz (a bitcoin bull and a former hedge fund manager and Goldman Sachs investment banker) said that the price of bitcoin is set to “return to its all-time high of nearly $20,000 in the next 18 months.” 

Despite the 2018 bear market that saw bitcoin’s price go as low as $3.100 in December, Novogratz believes that “only a devastating hack against a crypto exchange or a sudden shift in regulation” will bring back the price of bitcoin to such lows. 

However, bitcoin is not the only asset that has been having a good year. The International Financial Corporation (IFC) believes that “gold prices will continue to rise this year.” According to Neil Pereira, IFC’s principal investment officer, the future of the gold market includes some “long term supply increases” even though the market has “been in balance for some time.”

Similarly, Andreas Kalteis, the CEO of Novem Gold says, “with regulatory frameworks growing up and both gold and crypto on the rise, a company dealing in both might just be the right use case for an ICO even in 2019. “

The impact of Libra

Facebook’s release of the Libra cryptocurrency has also raised questions about the future of blockchain and the cryptocurrency industry.  For most onlookers, it might be considered a good thing for big tech firms like Facebook, to move into emerging spaces like blockchain and cryptocurrencies.

However, a good number of tech experts believe that projects such as Libra could actually “undermine the stability” of the global banking system. In response to the Libra project, the US House Committee on Financial Services has requested Facebook and its partners to stop further development. 

By Facebook dipping its toes in cryptocurrencies and the blockchain space, it is helping legitimize what has so far been a volatile market. If the Libra project gets off the ground, the ramifications are large and will bring about regulation of mass-scale and enterprise adoption. 

Final remarks

With better regulations and supervision, funding startups through ICOs would be much safer for investors. In the long run, users would have better control over their data and get more freedom from monopolistic centralized entities. 

At the moment, however, it remains to be seen whether projects like Libra can legitimize the blockchain industry or suffocate it through monopolization. No matter the case, the signs clearly show that cryptocurrencies have survived the test of time and are here to stay.


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Disclaimer:  This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of Cryptocurrency , and should not be attributed to, Cryptocurrency


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This post is also available in: , Who In The World Would Do An ICO Today?, Criptomonedas e ICOs, Criptomonedas e ICOsEspañol (Spanish)

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