Initial Coin Offerings Boom in 2018
The amount of funds raised through initial coin offering in 2018 more than equals the amount raised in 2017.
Overall statistics show that the Initial Coin Offering (ICO) boom is still gaining momentum. The amount raised in the first six months of 2018 more than equals the total investment in 2017, Snowfox Technology, a tech solutions provider for startups announced.
In an interview with Cryptovest, SnowFox Technologies Ambassador Mike Raitsyn said that in the first six months of the year, ICOs had raised nearly $722 million compared to the $655 million raised in 2017.
“The average investor's check in the ICO project varies from $40 to $5,900, so the ICO market is again experiencing a deficit of large investors willing to invest in the project an amount more than $ 50,000. However, the average amount of investment in the project in June 2018 is twice as high as in the same month in 2017,” Snowfox said.
Asked to comment on why investors are still attracted to ICOs despite the bad publicity the unregulated crowdfunding platform is getting, Raitsyn said venture investors and corporations continue to finance startups and test blockchain technology in search of practical applications in the hope of increasing their capital.
He added that since 2014, the amount of raised funds for all start-ups was about $13 billion despite some problems with the ICO regulations. The prompt increase in the cost of crypto project tokens from the end of 2016 to the present day has grown from $20 billion to $252 billion (passing through a peak of $800 billion) - or 12.5 times, “which is also one of the main incentives for investing in cryptocurrency among entrepreneurs and funds, despite increasing negativity and worsening reputation of token sales,” he said.
Analyzing the ICO statistics provided by the Snowfox Technologies team, more than half of the crowd sales have already failed, with 15% closing at the stage of the initial offer and 30% after the ICO.
He said, “If you study all the projects in more detail, then about 11% of the projects will be dead - their teams long ago stopped responding to community questions on social networks and updating their official sites. And only 44.2% of ICO startups continue to operate 120 days after the fundraising is over.”
The stability and probability of success during the ICO is 90% determined by qualitative documents like a white paper, and a clearly defined and detailed roadmap, Raitsyn said.
In general, he said the success of an ICO depends on a variety of factors - from site selection and the search for competent specialists (the team is the key to the success of any project) prior to compiling and implementing a clear, consistent marketing plan. Projects should not forget that the transparency of the ICO should be observed, and even at the stage of the idea, the founders should be 100% sure of the feasibility of the conceived idea.
Moreover, Raitsyn said the viability of the project after the ICO is determined by the demand for the practical application of the developed blockchain-solution. ICOs, which are focused on investment attractiveness, leaving research on the practical application of the product to be developed later, face a harsh reality. The cases for using blockchain technologies in traditional industries (financial, engineering, analytical) are rare. After several months (average – four months), the project cannot find an opportunity to apply or sell its product and begins to die, he added.
Raitsyn explained the cryptocurrency market today has ceased to look like the Wild West. In many countries, there is already a legislative base and bodies regulating the activity of all players in the market. However, digital currency is still a high-risk market - making a profit from investing in an ICO cannot be guaranteed.
“High volatility, security of a private key and speculations are actual dangers that a private investor must take into account. With fraudulent ICO the community is facing less and less, and all Snowfox Technologies projects are trustworthy,” he added.