Initial coin offering is expanding in popularity and acceptability in recent times that it deserves no introduction. However, for the sake of emphasis, ICO is a rare investment phenomenon that gives an opportunity for small and large capital investors to pool capital and resources into projects they deem valuable. By buying into an ICO, you will be trading off an established Crypto like Bitcoins and Ethereum for the relatively unknown coin. You may call it a risky venture, but one with a possibility of a massive pay-off. ICOs have been able to raise roughly $2.3 Billion till date, with a lion share happening in the first half of 2017.
Since April 2017, ICO funding has been above a million dollars monthly. The meteoric rise in the popularity of ICOs doesn’t seem like it’s going to end. There are some identified factors driving this new funding method;
Increase in Market Capitalization of Cryptocurrencies
With the current market value of Bitcoin and Ethereum, the market capitalization of Cryptos stands at nearly $200 Billion. From $135 price tag of Bitcoins in September 2013 to the nearly $6,000 value per Bitcoin in October 2017. The price of bitcoin has appreciated by more than 40X. A similar story can be told of Ethereum, from its $2.83 value in 2015 to the present price tag of $300.
Fear of Missing Out (FOMO)
With the massive gains and investment early Crypto investors are sitting on, Fear of Missing Out derivable from ICOs history of success is fueling the thirst by individuals to join the ever-increasing Crypto market. ICOs are offering these individuals an opportunity to make a kill in profit in the future.
Return on Investment From Token Sale.
Early buyers into ICOs are experiencing massive returns on their investments. Ethereum led the pack with 99,449% ROI, Stratis follows closely with 45,260% and Augur increasing at 2,702%. Interestingly, the ROI is still on the increase. ICOs are benefiting from a snowball effect from the success of Ethereum and Stratis.
The Blockchain Technology
Businesses and start-ups are widely adopting different Blockchain technologies for different purposes. The decentralized structure of Blockchain technology is fueling innovation, development and several new products. Aside start-ups and founders, traditional venture capitalists are also channeling funds towards decentralized applications. This is utilized to solve problems associated with centralized structures.
Future Trends and Future of ICOs
In the early days of ICOs, it was more about start-ups coming to the market with zero capital base. However, in recent times, established venture capitalist businesses are joining the fray by tokenizing their businesses.
It is expected that with the increasing value of ICOs, mature and deep pocket investors will come into the market to explore other areas of ICOs yet unknown.