ICOs Raised 95% Less in January 2019 Than in Their Best Month, Data Shows

Omar Faridi
  • ICOs are not receiving as much capital as they did during the crypto bull market of 2017.
  • However, ICOs are still performing better than what they did January 2017.

Investments in initial coin offerings (ICOs) have dropped by nearly 95% according to data from cryptocurrency analytics firm Coinschedule.

In March 2018, ICOs raised over $5.8 billion, however Coinschedule reported the popular fundraising method attracted only $291 million in total investments during January 2019. Although ICOs have not generated as much capital as they did when blockchain project valuations were a lot higher, Coinschedule pointed out that ICOs still raised over 70% more funds last month than they did in January 2017.

When compared to the time period during which cryptoasset prices hit record-level highs in late 2017 and early 2018, the ICO market has slowed down considerably. Coinschedule’s data shows there were less than 50 ICOs launched in the first week of January 2019. Moreover, the ICO ecosystem received only $6 million in total investments from 424 different public token sales tracked by Coinschedule. Significantly, this is the smallest amount raised by ICOs since 2017.

$1.4 Billion Raised From ICOs In Q4 2018

As CryptoGlobe reported last week, ICOs netted 25% less in funding during Q4 2018 when compared to Q3 of the same year. This, according to data from ICOBench which also revealed in the same crypto market report that there were 594 ICOs completed in Q4 2018. During the previous quarter, 554 ICOs were successfully conducted (as they managed to reach their fundraising target).

Data from ICOBench revealed that $1.4 billion was raised by ICOs in Q4 2018, while Q3 of last year saw public token sales generate $1.8 billion - according to ICOBench.

As covered, a study conducted by Satis Group found that more than 80% of ICOs launched in 2017 were scams. However, the fraudulent token sales only managed to attract 11% of total investments made in ICO projects (during 2017). According to Satis Group’s report (published in July 2018), approximately 70% of the funds raised by ICOs went towards helping legitimate crypto and blockchain-related projects.

Security Token Offerings (STOs) Provide Regulated Investment Options

In December 2018, Jerry Ji Guo, a Chinese-American who previously worked a journalist for the New York Times, was charged for his alleged involvement in a $3.5 million ICO-related scam. Guo is now facing up to 20 years in prison as he was found guilty of orchestrating fraudulent schemes in which he stole large amounts of cryptocurrency from blockchain startups that had employed him as a consultant.

Due to the large number of scams orchestrated under the guise of ICOs and the lack of proper regulations for the crowdfunding method, many companies have introduced security token offerings (STOs). These are regulated token offerings that allow investors to acquire cryptoassets which are tied, or backed by, real-world assets such as stocks, debts, commodities, and real estate.

Crypto-Backed Virtual World Decentraland Goes Live

  • Cryptocurrency-backed virtual world Decentraland has made its official launch.
  • Users have traded more than $1 million in virtual assets over the last ten days.

The cryptocurrency-backed virtual world Decentraland has made its official launch, giving users the ability to spend real money on digital property.

Decentralaland, which raised more than $20 million during its initial coin offering (ICO) held in 2017, has officially launched its virtual reality world living on the Ethereum blockchain.

Users have been rushing to spend money on virtual plots of land they hope will appreciate like real-world real-estate. As previously reported, crypto gamers spent more than $600,000 last week to purchase digital plots of land in the leadup to Decentraland’s official launch. 

Long-time holders of Decentraland’s native coin, MANA, are also cashing in on the craze, with the asset more than doubling since the beginning of 2020. According to data collected by NonFungible, more than $1 million in assets have been traded via Decentraland over the last ten days, making the project’s virtual world the most active entity on Ethereum’s blockchain. 

Ari Meilich, the game’s project lead, told Bloomberg in a phone interview,  

The users are in control of the digital assets, which is something that hasn’t happened before.

He continued, 

We think that over time players will gravitate toward games where they are more in control.

Decentraland is already trading more than 10 times the virtual assets as CryptoKitties, which was previously one of the most popular Ethereum network applications. 

Featured Image Credit: Photo via Pixabay.com