Turbulence in billion dollars ICO market and its future
Initial coin offering (ICO) is one of the easiest ways to raise capital beyond geographical locations. The year 2017 was one of the successful years for ICO market, during that time various Blockchain companies raised billions of dollars. Unlike other fundraising methods such as IPO, equities are not offered in ICOs, instead, digital tokens are offered, which can be used in the product and traded on the crypto exchanges.
The public had experienced the sharp decline of ICO market after Dec 2017, which results into billion-dollar loss of investment. There were many factors which contributed to the decline of the ICO market, government regulations, investor’s awareness, poor marketing, and scams were few of them. Looking at the current situation, 50% of the ICOS were unable to raise the funds for their products. Nevertheless, there are good products with proper ROI structure, good financial model, and empirical five-year projection, which helped them to raise the capital for their innovative products. Based on the investment trend, most of the investors shifted to Security Token Offering (STO) and Initial Exchange Offering (IEO) to reduce the impact of the volatile market. Due to massive loss, small investors have also turned down their face for ICO investment. Majority of the successful ICOs in the bear market either got seed investment or angel investment.
As an ICO and Blockchain expert, I see ICO market is getting matured day by day and governments are putting new rules to protect individuals and investors. There is no doubt that the ICO market will not succeed in the future, with the passage of time it will flourish day by day. When companies will realize that it is not easy to raise funds with just one white paper, they will start implementing innovative functionalities, right ROI structure and increase in token value with the real use cases.
To recapitulate, ICO market is going through a tough time, but in future, we shall see the upward trend with quality Blockchain projects.