In 2017, Initial Coin Offerings (ICOs) was seen as a gold mine that could make anyone rich within the twinkle of an eye. The only problem was, the profits made from one ICO and invested in another could yield losses. Nevertheless, these projects are still hale and hearty in 2019, a year after Bitcoin’s bubble.
Raising Funds Through Initial Coin Offerings
ICOs, Token sales, Crowdsales, and other names they go by all have the same agenda. That is, to raise capital from investors to launch a project. Nonetheless, not all have a solid project that will help to achieve what is stated in their roadmap. There are even some whose proposed projects and team members are only a figment of the imagination. As Bloomberg reported on February 13, 80 percent of ICOs in 2017 were a fraud.
Despite this performance in the past and Bitcoin’s price trend, ICOs are still thriving. CoinSchedule’s data which Bloomberg referred to reveal that as of January 2018, ICOs raised about $2 billion. But in January 2019, $292 million was raised. In the same vein, there are currently 70 active token sales and 17 were slated to begin last week.
Investors of Initial Coin Offerings
At this point, one may wonder who are its investors given the recent crackdown by the U.S. Securities and Exchange Commission (SEC). The latter has listed hundreds of documents relating to ICOs that have been closed down or companies that have been fined. There are also details of what categorizes a token as securities that need to be registered. Thus, most ICOs are no longer conducted in the U.S.
That aside, locations such as Switzerland have become a fertile ground for these projects. Here, the Swiss FINMA is responsible for reviewing a company’s plan relating to such offerings before giving them the go-ahead. The same is reported of Asian countries whose laws may not be as stringent as that of the U.S.
BitTorrent ICO Successfully Concludes
It is also worthy to note that while there has been an increase in the number of token sales, investors this time around, have more interest if there is a mature project backing such ICOs. According to Justin Sun, Tron’s CEO, “These days, people are looking for both vision and signs of good execution.”
An instance is a case of the BitTorrent crowdsale on January 28 which raised over $7 million. The token sale was made possible using the Binance LaunchPad platform, and it was completed in less than 15 minutes. The reason cannot be farfetched because BitTorrent is a popular file-sharing service with about 100 million monthly users.