ICO Crypto Funding Takes a Tumble, But It’s a Good Thing
Despite being a record year for initial coin offerings (ICOs), funding has dipped in recent months. According to a new report by Autonomous Research, ICO revenue in August dropped to just $326 million. During the first three months of 2018, the organization’s research shows the monthly average was around $3 billion. Indeed, this data tallies with a previous report by Autonomous Research which showed that ICO investments this year had surpassed the $12 billion mark.
ICO Hype Subsides
Although the ICO list register is still the place for businesses and investors to be seen, it’s clear the hype is starting to subside. Part of the recent dip could be down to the ICO news stories that emerged in August. After reviewing the data for 2017, the Statis Group found that more than 80% of projects were “scams.” Tracking the date of latest year’s ICOs, the company found that many of them had either ceased operations or their coins weren’t listed on any exchanges.
In total, the report suggested that $1.34 billion had been lost to rogue initial coin offerings last year. Away from the Statis Group’s data, Bitmain founder Jihan Wu has also played down the overall value of ICO token sales. Talking to CoinGeek, the tech expert said that bubble would eventually burst as the current surge is similar to the one that took the value of Bitcoin et al to unexpected heights in 2017. Although August’s results might not be confirmation that Wu was right, investors are slowly starting to question ICOs.
Reality Restores Our Critical Faculties
The lack of regulation is an issue that needs to be addressed. With research showing that any given ICO list can contain a vast number of weak or illegitimate projects, those with money to spare are right to be cautious. Fortunately, the industry is reacting and companies like Investoo are working to make ICO comparisons easier.
However, even with these provisions in place, novices should be asking “what is ICO XX?” before they think about how much money they could be making. In much the same way new investors were caught up in a wave of over-positivity in 2017, people are now losing money by not being truly critical of ICOs. Even with the best of intentions, the majority of crypto projects fail. Investors have slowly lost sight of this in recent months as money has flooded into the market and FOMO (fear of missing out) has taken hold.
However, with ICO news stories restoring some reality in recent weeks, it appears as though people are slowly jumping off the bandwagon. Although they may not stay off forever, people are starting to be a little more critical. The short-term effect has been a dip in ICO funding. However, in the long-run, savvy investors will help weed out the weak and ensure the market is more stable for everyone. So, while the ICO crypto bubble may have shrunk, a change of pace has been necessary to ensure it doesn’t burst.