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The ICO Bubble Is Running Out Of Air: Investment Fell 90%

Initial Coin Offerings were a big boom last year. Since their inception, they were adopted as the most convenient and easy way of crowdfunding a project. Had an interesting idea and you lacked resources to put it in motion? Just find the way to tokenize the project and launch an ICO. And for the most part, fundings were almost surely secured. Statistics say that ICOs raised more than 5.6 billion dollars just in 2017, according to Business Insider. A humongous amount of money for a financing instrument that has not been regulated still, but it was fueled by FOMO and also by great market performance.
Still, because some of this projects were scams and affected lost of investors, the regulatory eye was set on them this year. Many ICOs were investigated this year and the controls were tougher. An investigative report from an independent firm named Autonomous Research found that the ICO bubble has been leaking air since January. According to them, the investment in Coin Offerings has slowed down considerably, going from $2432 million in the first month of this year, to $279 millions during this month.
This could be caused by several reasons, and the study goes into detail to explain them:
First, there could be a distrust of investors to put money on projects that, even if have a solid business model, it is still not regulated. Tokens in a platform do not entitle owners to any legal rights whatsoever. This makes buying equities so much more safe than going through a coin sale that could not give you anything in return.
Also, there is the regulatory turmoil that could end soon with the SEC declaring all ICO tokens as security tokens. This would have a terrible impact on the market, as exchanges could not list these types of instruments until being authorized. So this situation makes investors be cautious about ICOs.
And the third reason would be the ban of all Chinese exchanges and ICO startups from operating inside their country. China is a really big hotspot for cryptocurrency investments, and the market took a hard blow when all of this money was taken from their hands by the Chinese regulators.
In any way, the ICO craze of last year has been substituted by a cautious approach by investors, that are still waiting for regulations to clear the field of any uncertainty about these investment and crowdfunding methods.

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