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.

Metal Pay's MTL Jumps 20% After After 'Thumbs up" From Youngest Bitcoin Millionaireungest Bitcoin Millionaire

Metal Pay, a peer-to-peer payments platform run by Metallicus, has seen the price of its MTL token jump on cryptocurrency exchanges this week after receiving an undisclosed amount from the youngest bitcoin millionaire Erik Finman.

According to a report published by CoinDesk, Metal Pay’s CEO Marshall Hayner partnered with Erik Finman to develop an “all-in-one” cryptocurrency banking platform that’ll haven exchange with 17 digital assets, a digital bank, and a payments applications with social features similar to those of PayPal’s Venmo.

The report notes Metal Pay has so far processed around $11 million in payments from nearly 130,000 registered users, across 38 states. Per month, it adds, Metal Pay processes $1 million in crypto or fiat.

Finman reportedly invested a “modest amount of bitcoin” to finance the development of the startup’s banking and exchange ecosystem, which reportedly holds around $2 million in cryptocurrency and fiat. The young bitcoin millionaire added however, he would be willing to put his “400 something” bitcoin fortune on the startup.

After CoinDesk’s report was published users seemingly flocked to cryptocurrency exchanges to get their hands on MTL tokens. At press time, CryptoCompare data shows the token’s price has risen 20.9% against BTC in the last 24-hour period, and 22.2% against ETH.

MTL's price performance in the last 24 hours

Metal Pay’s CEO, Hayner, reportedly helped build Stellar and Dogecoin before he founded the payments startup in 2016. The firm has received $3 million in a funding round from ShapeShift CEO Erik Voorhees, G2 Ventures, and Gateway.

The company is said to be actively working with regulators, and to have partnered with Arkansas-based Evolve Bank and Trust to provide FDIC insured deposit accounts, as well as other financial services in the future.

Proof of Processed Payments

Last year, Hayner developed a protocol known as proof of processed payment, which distributes MTL tokens to Metal Pay’s users according to the amounts they transact using the platform. It helps reach consensus and validate transactions.

Through it, users can earn up to a 5% reward on their transaction volume, which Hayner notes “for consumers, is construed as cash back.” These rewards can be converted to fiat, sent to another user, or held.

MTL holders may also receive other rewards, Hayner notes, as those who hold “over 10,000 MTL on an average spot price between Binance, Kraken, and Bittrex” won’t be charged fees. Feeless options for merchants are also being considered.