Crytpo advisor Brian Kelly, portfolio manager of BKCM, a crypto investing firm, declared yesterday on CNBC about how he thinks that while the market is flooded with several Initial Coin Offering options, most of them are overvalued compared to the most traditional cryptocurrency market prices. Initial Coin Offerings (ICOs), the most popular way of crowdfunding for emerging cryptocurrency projects, have experienced a boom since last year when almost 300 ventures were financed in that way.
Developers prefer to leverage this mode of financing due to the relatively low experience and requirements asked by the government to do that. Investors pay cryptocurrency or fiat money to get into a specific platform and get rewarded with tokens that are related to that specific platform.
But, as Brian Kelly states, some investors are shifting gears about it and examining the market for the function of every individual token. Too many of these options also can cause confusion and make them question if there is really a need for it at all. He stated:
PEOPLE ARE STARTING TO SAY, ‘I’M GOING TO PUT THE BRAKES ON THE ICOS RIGHT NOW. I GOT MY PORTFOLIO. I DON’T NEED A SEVENTH OR EIGHTH ICO,'”
He also declared that to him, ICOs are losing steam; but the numbers state otherwise. ICOs are one of the most popular means to kickstart a cryptocurrency project. Just this year, more than 300 ICO projects have appeared, surpassing the number of projects issued last year altogether.
Even with the regulatory overhaul that many countries are having regarding ICOs, there is still quite the buzz about them. But Brian states that the market is heading in an opposite direction: Many investors are putting their money in traditional cryptocurrencies like Bitcoin and Ethereum instead, and skipping ICOs.
A recent study made by the Boston College School of Management revealed that while some ICOs can indeed be shortlived, the average revenue of an early investor reaches more than 80% profit in less than two months. This could explain the eagerness of some people to invest heavily in these options.