ICO activity has plummeted in 2018, according to new research…
Some 12 months again, the market was awash with initial coin offerings (ICOs), as more and more cryptocurrencies came to market, primarily in search of riches. The fact that the price of Bitcoin was near $20,000 added fuel to that particular fire, and according to research from Autonomous Research, at the start of 2018, ICO fundraising was in a strong position.
It noted that at the beginning of the year, some $2.4bn was raised from ICOs in January alone. Adding EOS and private token fundraising, that number goes above $3bn, says the report.
But things, it notes, have dramatically changed.
The price of cryptocurrencies pretty much across the board have fallen since January, with Bitcoin for one trading at around $6500, a far cry from its near-$20,000 peak. Furthermore, there’s been growing regulatory pressure on ICOs, and a flood of coin offerings all chasing similar investors.
All that, combined with the growing market pressures on cryptocurrencies, has seen a dramatic fall in monthly ICO activity. Autonomous Research reckons that around $300m in ICO funds were raised in September in total, and that amounts to a 90% fall from the start of the year.
It cites a number of possible reasons for the fall, one of which is the American Securities and Exchange Commission (SEC) looking to rule that ICOs are to be classed as securities, and thus fall under its purview. A fall in lending from China has also been suggested as a possible reason for the ICO drop.
Whether ICO numbers will recover at the back end of 2018 remains to be seen. It looks like it pays to be on the cautious side, though.