It seems that this word is invented to create a surprised face at the third sound: ICO. Truly, this abbreviation has provoked controversial feelings in the last couple of years for everyone who has somehow been involved. These ranged from high hopes to bitter disappointment, from delight to cynical skepticism. Moreover, according to statistics, the skeptics eventually have won over an army of the disappointed — more than 60% of the projects from 2017 could not succeed in offering the markets any distinct product. To be specific, their initiatives ended up in failure. A vast number of ICOs was recognized as a scam, however, the first three quarters of 2018 has shown that projects raised $13.9 billion, which is $10 billion — or 263% — more than the total raised amount in 2017.
In total, investors lost up to 66% of the funds invested in 2017. Apparently, they didn’t see the high risks in pursuit of high interest rates, thus forgetting the golden rule of any investor — to diversify the portfolio. The caution inherent to institutional investors, who allow a risk share of 2-5% of their total investment, was obviously thrown away by the ICO market investors. As well as the will to go deeper into a business knowledge and the ability to understand it.
Looks like many market players are becoming aware of the fact that it is not necessary to put all their money on teams, with not a single business case in their experience list. The market feels a change in sentiment and brings to the main stage those blockchain startups who are trying to combine the innovativeness of the technological solutions and the time-tested business models that have already been successful and brought income to the investors in the traditional financial sector.
TOON by Maxim Smagin
The beginning of 2018 was promising for the ICO: during the first half of the year, initial coin offerings have gathered $6.3 billion. This is 118% more than the amount of fundings that was gathered during entire 2017! This almost involuntarily makes anyone think that maybe investing in ICO is not such a bad idea after all. Because despite all the criticism, there are always chances that you have chosen the right one and you are going “Straight to the moon.” And this is understandable since at this moment ICOs have gathered staggering $21 billions, which is obviously impressive. However, just like most first impressions, this one is also false. Let’s start with the numbers and check the EY study up close and personal. According to their data, most of the people that invested in ICOs of 2017 has earned nothing. 86% of coins made from the ICOs from back there are traded below the price they were listed for, and 30% of them has lost all their value. So basically, the average investor in projects of 2017 can only show 66% losses in the portfolio (read more)
ICO market and cryptocurrency market as a whole suffers from negative news, feedbacks, and stances. Apart from obvious scams, the market just recently realized the low level of success of the total number of startups launched in 2017, as it was recently summarized by EY. The aggressive marketing made investors — most of them private — believe in miracles. It was fueled by various marketing pressure mechanisms, including the participation of celebrities in project promotions. We all know, that traditional advertisement actively utilizes celebrity names in promoting consumer goods and services. But it’s not so simple with the financial market. One can throw away a bottle of untasty coke promoted by their favourite actor and forget about it forever. Obviously, it’s not the same with investments (read more)
During the first three quarters of 2018, ICO projects managed to attract $13.9 bln of investments, which is by $10 bln more or 263% higher than the total volume of 2017. At the international forum Blockchain Life 2018, we talked to the participants of the crypto market to find out whether ICO has retained its popularity and what kind of sentiments exist on the market of blockchain projects in general."Depressive”, - without a moment's hesitation shoots the Executive Director of one of the projects Andrey TIKHOMIROV: “This is due to the fact that the market was pumped with air, all these promises of 2017 and illusory projects that went nowhere. Everybody was running after the pink pony, but got a little black donkey, limping on two legs”. Statistics show that more than 80% of the ICO have turned out to be scams, which gave the term a very negative color (read more)