ICOs Have Entered Intensive Care
12,000 people attended Blockchain Expo in Silicon Valley on 29 and 30 Nov. 2017, to date one of the biggest gathering of crypto enthusiasts, which provided a large enough sample of people in the ecosystem to measure the current temperature of ICOs as an emerging capital market.
There is no doubt ICOs are entering a period of intensive care but should emerge fitter and stronger in the second half of 2018.
Yet the remedy proposed by regulators may actually kill the patient.
We are seeing the end of the Bootstrap projects replaced by business people who see the ICO light that comes with established companies, real customers and revenues. That puts them in the prime position of being able to afford increasingly expensive ICO processes where costs have more than quadrupled in the past 6 months.
With the CME announcement and the emergence of ICO platforms that cater for security tokens offering a regulated governance approach, new crypto funds, emerging ETFs and new exchanges that combine old capital markets with crypto; there is now an ‘on ramp’ for institutional investors, high net-worth and VCs all itching to join in. The operate on the hunch that just a small strip of crypto in their investment mix will drag the mundane performances of 99 percent of funds above market returns without having to do anything.
The spike in Bitcoin price is therefore no coincidence as people start to wake up and big money joins the queue to buy Bitcoin (and Ether), and why the underlying network performances in recent weeks have been slowing considerably. At the time of writing this BTC is approaching $14,000.
The main barrier to entry is the way in which ICOs are currently constructed. Infamous White Papers that promises to deliver a lot without any proper governance or pressure on the founders to actually deliver what was so clearly promised. In the next evolution of the ICO process we will see White Papers look more like an Investment Memorandum and Prospectus (the regulators intention) than the lightweight commentary we see today.
Remember 75 percent projects fail to meet Soft Cap