Are STOs really better than ICOs? If so, for whom?
With the current bear market, everyone seems to be “exiting” the market with no hope in the near short-term future for the “HODLers”. Despite this negative market and the underlying bearish sentiment, there is a certain amount of interest that still keeps the retail investors searching. In a recent research by AMBCrypto during early January’ 19, out of 248 respondents in Singapore, India and Hong Kong who invested/lost/made money in the last two year in the cryptocurrency space, at least 47% of the respondents are still actively looking for their “ideal ICO investment” which can make them a “10x profit”.
The other leg of the research also showed that at least 57% of the respondents from different demographics in European and other western countries are still very excited about an investment opportunity in the cryptocurrency space. The interest, however, is not blinded by the FOMO feeling this time around. The bearish market has empowered people to be resilient and remain unaffected by this bear market. Websites like ICObench are giving these investors a real look into how these projects are actually doing by giving them expert reviews who understand this market and give an objective analysis of these projects.
STOs or essential Security Token Offerings have been the new ICOs of late. Brock Pierce recently said that “2019 will be the year of STOs”. There are many advantages of the project being an STO for the investor. You are essentially buying a tangible asset which is backed by the profits, revenue, etc of a company. More promising and “secure” as compared to an ICO, since the SEC gets a say in this.
Now the biggest aspect that projects/investors seem to have forgotten is the fact that ICOs allow for freedom (in all aspects) and liquidity, although yes, most of them are crap. STOs won’t get listed on your regular exchanges as STOs need to be traded where FINRA can keep a close watch. There will be a lock-in period for about a year where STOs won’t be traded.
The other thing about STOs is the fact that it will not be open to the public as only accredited investors will be able to participate. There is a clause where STOs can open into the general public but then will be limited by the amount you are allowed to raise (which currently is only $1 Million a year). There are other limitations of STOs that have still to be figured out by the industry players. ICOs, all though most of them turned out to be a dud in the last year, still remain as the only option for retail investors from all over the world to invest in. A hybrid, STO-ICO model might become a possibility as industry evolves.