Today we will post ICO expert opinion from the latest ICO Market Review #27
Ethereum has lost a lot of value this year because ICOs are liquidating it for FIAT to fund their activities. Bitcoin was much more resilient during last year partially for this reason. There is much less ICOs accepting bitcoin than ether. It is entirely possible that price of ETH has reached its bottom due to the fact that it
is very unfavorably exchanging it into FIAT any longer or that those who were relying on it, had liquidated it already. In any case, the bear market will end when a big chunk of ICOs have exchanged all their reserves of ETH into FIAT, and the demand to invest ETH will exceed the amount of liquidated ETH.
Binance CEO, Changpeng Zhao believes that the bull market will return at any moment! He might know something which the average investor doesn't know yet: the fact is that many investors are paying attention to what high profile people are saying and they will act on it. Bitcoin's recent bull run shows that investors are tired of the situation.
The ICO's which survived over the last year are the ones that raised enough money to sustain this bear market. Smaller ICOs are possibly closing their shops (e.g. if an ICO raised $1M a year ago, this would be worth not more than $200K today). Those ICOs probably have already closed their shops. If the market starts recovering, it will be much less enthusiastic than last year. Investors learned their lesson, and they will look more closely now before parting with their money. The recovery will be slow.
While speaking with another ICO advisor, Cooz Komei Tokita, I was given this excellent idea which he agreed I share here.
One of the highlights was this:
In venture financing, it is common for the investors of the previous round to sell part of their holdings to the next investor for a profit. This can be achieved relatively easily using tokens and especially benefit the investor due to its increased liquidity. For example, an investor can buy $100,000 (USD) worth of tokens in the initial Seed" sale where he receives a 100% bonus, then sell a portion if desired for a guaranteed profit or hold on for any amount of time until the token to equity swap is initiated."
This strategy gives early investors the opportunity to take less risk. This new funding mechanism also provides an ICO with the opportunity to receive seed funding much easier by providing an option to liquidate tokens in subsequent rounds before the ICO is over.