About $118 million has reportedly been raised via initial coin offerings (ICOs) in Q1 of 2019, over 58 times less than $6.9 billion, the amount raised during the same period in 2018, the Wall Street Journal WSJ reports on March 31.
The report cites data provided by ICO analytics website Tokendata. The wall street journal report argued that investors have been put off by the actions of regulators against non-compliant ICOs, as well as the general bear market over the past year.
One of the latest actions against ICOs is the United States Securities and Exchange Commissions’ (SEC) decision to charge crypto firm Gladius network with selling unregistered securities after the company self-reported to the commission.
The founding partners of Future Perfect Ventures, Jalak Jobanputra claimed last month, that venture capital valuations had also taken a major hit occasioned by the crypto-currency bear market. The recent report also claimed that 2,500 projects tracked by token data since 2017, only 45 percent successfully raised money.
The wall street journal goes on to cite Token data as saying that 15 percent of tokens issued in successful ICOs were trading at or above their original price. The article went on to cite attorney and consultant Joshua Ashley Klayman as stating that ICOs themselves may disappear, the market for digital currencies won’t though.
The so called security token offerings have recently attracted a lot of attention from both government regulators and private sector regulators. In the US, investors have to deal with a patchy regulatory landscape when it comes to token sales, with the state of Wyoming passing a blockchain tokenization related bill, where a similar law was passed in Delaware in 2017.
The crypto bear market that has lasted for about 15 months now has been touted to be on its last leg by a number of commentators and speculators, whether that is true, we can only wait and see. We do know though that the crypto winter has not only led to bad fortunes for ICOs, but also a freezing of the crypto mining industry.
Crypto miners around the world have to deal with the tough facts; the tough facts are crypto prices are at a depressing low right now while costs of mining such as electricity remain high. ICOs are also taking the hit because of the low prices as well so much so that a startup named ‘Sponsy’ has opted to cancel its ICO as trying to sell the company on eBay for $60,000.
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