Recently, we have written that Bitcoin and Ethereum are not in trends anymore as the search requests dropped drastically over the year. Unfortunately, ICO is also following the same tendency of decreasing its popularity. Let’s look deeper at the statistic data and reason why this phenomena is happening.
Autonomous Research, a company that provides global investment research in finance, has compared the raised funds by ICOs, token sales over the year.
Research shows that funds raised by token sales in January 2018 overcame the psychological mark of $2.4 billion, while September investments were less than $300 million, according to the data. It means that the activity has fallen over 90% since the beginning of the year.
Autonomous Research highlights three main reasons that are able to explain the decrease in interest.
The first one is that investors are losing faith in ICOs, recent scams, big hackers attacks, intransparency fuel to the fire. Moreover, they mostly choose equity in companies that offer ICOs.
The second reason is STOs (security token offerings) that highly likely replace real ICOs. This hypothesis was announced by a blockchain mark consultant Michael Spencer:
“In the latter half of 2018 and in 2019 we are therefore going to see a huge rise in STOs, and they may eventually out-duel ICOs.”
Even though STOs provide with bigger security and less possibility of fraud, Autonomous Research still thinks they will not hit the market in the nearest future.
The third reason is the collapse of Chinese P2P lending services. The Chinese authorities blocked access to ICO platforms in April this year, though token sale activity remains high in the Asian country. Autonomous Research is still in the process of checking data about China.
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