Several Initial Coin Offerings (ICOs) have been launched to the market in the past few years. Most, however, have little to show after several months or years of work. According to some reports, ICOs were able to raise more than $30 billion dollars in the last two years.
What is Happening with ICOs?
There are just a few virtual currencies and blockchain-related projects that have released interesting products or services to the market. For example, Binance Coin (BNB) is one of the most prosperous virtual currencies in recent times. It was able to handle the bear market this year, in a much better way than other established virtual currencies.
Binance Coin (BNB) is also the base virtual currency of the Binance cryptocurrency exchange. Binance is the largest exchange in the market by trading volume. In the last 24 hours, it has handled $614 billion dollars. In the future, Binance Coin will be the gas used to power the decentralized exchange that Binance is building.
Currently, Binance Coin is the 14th largest virtual currency with $1 million dollars market capitalization. Each BNB coin can be purchased for $7.86 dollars.
0x (ZRX) is another recognized asset that started from an ICO. The project aims at providing liquidity amongst decentralized exchanges that work with the 0x protocol. This virtual currency has been added to Coinbase, one of the largest and most important companies in the crypto world.
According to Sam Gellman, there is no single ICO with a real user based for things not related to speculation. On Twitter, he wrote:
“After $30 billion invested in the past two years in ICOs there still isn’t a single crypto app with a real user base for anything other than speculating on crypto. The BTC price movement is tough, but the lack of real user base for anything they’re investing in is tougher.”
After $30bn invested in the past two years in ICOs there still isn't a single crypto app with a real user base for anything other than speculating on crypto. The BTC price movement is tough, but the lack of real user base for anything they're investing in is tougher.
— Sam Gellman (@SamGellman) November 15, 2018
At the same time, the cryptocurrency market might not see very promising projects in the near future. With the regulatory issues that are being debated among the largest countries, ICOs might not have a flexible legal framework.
The U.S. Securities and Exchange Commission (SEC), has recently shut down two ICO projects. AirFox and Paragon were labeled as companies with token sales considered unregistered security offerings. Both companies would have to refund all the investors that invested in these companies.
Although the SEC explained that they support newly emerging technologies, market participants must adhere to local regulations.
“We wish to emphasize, however, that market participants must still adhere to our well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain,” the SEC informed.
With the last bear market that affected the whole industry in 2018, low-quality projects could be filtered. Only the best projects in the market will be able to continue. Those projects that survive would be able to improve, to have a stable user base and project for the future.
At the same time, with the last bull run in the ICO market between 2017 and 2018, investors would be careful of making the same mistakes. After seeing their funds evaporating, they would take better decisions for future investments in the ICO market.
The ICO world has to improve. And if the projects are not good enough, the market itself will be in charge of selecting the winners.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.