Crypto News

ICOs Raise Over $5 Billion This Year as Crowdfunding Model Grows

The Initial Coin Offering (ICO) market showed few signs of slowing down in December, as the total amount raised topped $1 billion through the first three weeks of the month. According to ICOData, a company that tracks emerging national economies, data released this past December showed that startups raised an estimated $5.3 billion in 2017. Just a few months ago, Hacked reported an annual public offering of about $3.3 billion for all ICOs. After a sharp downturn in the second half of this summer, ICO fundraising picked up from September to December. At the current growth rate, the group’s sales exceeded $951 million in December. A total of 752 ICOs were launched this year, raising an average of $7.1 million. IC

To get a sense of how the market has evolved, ICOs raised virtually no funds in March. In 2016, a total of 29 tokens were offered, raising $90.2 million. In 2015, that figure was $6 million across just three projects. The ICO’s leadership has changed in recent months, with Hyundai backing a $258 million sale in December. HDAC enables IoT devices to connect efficiently with each other, enabling a new connected economy in the future. Industry research shows that the Internet of Things (IoT) represents a $19 trillion opportunity when it comes to productivity gains. A complete breakdown of the top ICOs with raised funds is listed below:

Maturing market

It is early days for Token Sales but the market has seen significant growth, with investors increasing their investment opportunities as they see fit. Unlike six months ago, the prospect of raising $15-20 million behind a Whitepaper is slim. Investors are demanding a proven business concept, active community and a highly qualified team.

Market participants are also looking for guidance on how token sales are structured and whether any given investment opportunity will fall under the purview of federal securities regulators. This leads to a split in tokens.

Most startups are concerned about their ICO being labeled a security because it would put them under the scrutiny of regulators like the U.S. Securities and Exchange Commission (SEC). For the most part, ICOs will be labeled “utility” tokens as opposed to securities because this would negate the need to deal with federal regulators. After all, that’s the big appeal of ICOs. Startups really want to use the Crowdfunding model because it allows them to raise millions of dollars with very little pressure.

The lack of oversight of the process proved to be a double-edged sword as it opened the door for fraudsters and opportunists to enter the market. This eventually gave rise to a project called Useless Ethereum Token (UET), which was the name of the first crowdfunding project.

“You will give money to some random person on the internet, they will take it and go buy stuff. Seriously do not buy these Tokens,” UET states.

Despite not having any products or services, it has already raised some $200,000 worth of Tokens.

Even for the unwary, the ICO market offers a wealth of opportunities for both startups and investors. As the crypto craze continues to grow, the ICO market will see a lot of traffic. This is especially true when institutional money begins to flow into the cryptocurrency economy following the successful launch of Bitcoin futures contracts. Major exchanges are already in the pipeline for Bitcoin-based Exchange-Traded Funds (ETFs), a product that could open the door to institutional inflows.

It remains to be seen, however, whether the new regulations will bankrupt the organization. Regulators are currently struggling, even to define the cryptic terms, let alone how the Crowdfunding model will be implemented. According to CoinMarketCap, there are currently 1,400 coins in the cryptocurrency market. Collectively, these coins are worth more than half a trillion dollars, with trading volumes in the tens of billions of dollars per day.

Disclaimer : This information is provided as a personal blog, not as general information or investment advice. We are not responsible for your investment decisions.

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