ICO momentum is only expected to continue into 2018, despite a likely evolution that will transform them
If you’ve been following cryptocurrency headlines, you probably know that 2017 was a good year for Initial Coin Offerings (ICOs). But what you may not know is that the 752 ICOs launched over the past year, having raised more than $5 billion. This surpassed the early-stage funding raised by venture capital for the first time in history.
With 57 percent of large corporations such as Microsoft and others starting to embrace the blockchain, and mainstream companies like Aptoide and Kik entering the ICO space, this momentum is only expected to continue into 2018.
For months, news headlines have been packed with speculation about what’s next for cryptocurrency, its underlying blockchain technology and ICOs, and the funding mechanism of choice for startups in this space. Here’s what I predict to be the biggest ICO trends for the year ahead, based on my work launching numerous successful ICOs in 2017.
Trend 1: New structures for pricing and bonuses
In 2017, many ICOs were aimed at the big numbers, striving to raise anywhere between $10 million and $100 million. Many of them succeeded. However now, ICO companies are going lean. As crowdfunding has grown around the world, more countries are stepping in and creating limitations and regulations as to how much companies can raise in a calendar year and how much individuals can contribute.
Instead of crowdfunding large amounts, companies will raise only the bare minimum, or even less. Most will focus on raising anywhere from $2 million to $10 million. But as VC interest has grown, many companies will begin to focus on attracting limitless institutional investors to fill the majority of their capital needs.
Last year, the bonuses for early adopters were everywhere, leading to fast token flipping and massive depreciation. This year, expect fewer ICOs to offer bonuses. For the companies that do, bonus amounts will likely be smaller and have a lockup period of several months or years to prevent immediate trading. This will allow demand, and value, to grow.
Trend 2: Product funding through ICOs
Companies with an existing product tend to be much more successful than ones with simply a whitepaper and an idea. In 2017, ICOs were largely confined to the IT sector, with startups raising money to facilitate token distribution or fund their platform buildout.
Source/More: Five Biggest ICO Trends for 2018 | Finance Magnates