2018 the year of “Death” for the ICO Game?
Last year without a doubt was the year of cryptocurrencies, the year of massive gains for all investors and early adopters. Starting 2017 with a 17 billion market capitalization and closing it at over 613 billion, we felt like we were an inch away from mass adoption. As we moved into 2018 the hype and momentum continued, with the market cap reaching a top of 825 billions and we felt like we were on the top of the world waiting for the 1 trillion cap.
Then everything changed overnight!
To understand it first we need to talk about why we had that massive growth that lead to a 3505% increase in market capitalization. It all started with ICO’s. The term ICO (Initial Coin Offering) started back in 2013 with the first coin using the term being MasterCoin(MSC) followed by projects like NXT, ETH. Ethereum raised money with a token sale in 2014, raising 3,700 BTC in its first 12 hours, equal to approximately $2.3 million at the time. At the start of 2017 ICOs and token sales started to become more and more popular for startups to generate the initial capital needed to create and grow their projects. Before mid-year there were 18 ICO tracking websites. In May 2017, the ICO for a new web browser called Brave generated about $35 million in under 25 seconds (2 ETH blocks). In june 2017 the BAT Token has been listed for sale on crypto currency exchanges at a price of $0.0359. In 6 days BAT was trading at $0.245. This represents an approximate return of 582% from it’s ICO price. This move opened the eyes for multiple startups and/or established projects to start or move there idea/project to the blockchain and enter the game.
September 2017 Kik’s developer raised nearly $100 million in its ICO faze. Starting of October 2017, ICO coin sales worth $2.3 billion had been conducted during the year, more than ten times as much as in all of 2016.
From the investor perspective everything was so new, so super hyped, so beautiful that we did not cared to do inept research on the teams’ reliability of fulfilling their claims and we trusted any new project the market threw at us. As you may know most investor were not even reading the ICO pages, the whitepapers, we’re just throwing money blindly on anything that had the name ICO in the title.
From the startups perspective the game rules were set build any ICO based on an idea — make millions — release it to market — and the investors gain 100x once it hit’s the exchanges — everyone happy. The insane overhyped Growth of the ICO game let do any so-called developer to enter the market with crazy new revolutionary claims of changing the world, rewriting the rules of the banking system forever, and redesigning the future forever.
Here’s where the problems started. The ICO game started to become easy for any group or individuals to create a pseudo company — or no company at all, scrape or copy a whitepaper or not use one at all, and go to a token sale launch with just the basic concept of the idea. The problem with this is they either don’t have any knowledge to pull the concept in practice or have no intention of ever delivering a live product aka EXIT SCAM.
It would probably take me more than 2 pages to write down all the scam ICO’s of 2017 so I’ll just share a few:
Mybtgwallet.com ($3.3 million lost)
BitCard ($5 million lost)
Confido ($375,000 lost)
and many, many more.
With the huge decline in trust for actual reliable projects, investors started to become skeptical and worried about the market in general.
There would be more to talk when it comes to the fraudulent nature surrounding the ICO Game but right now to but in simple terms we can say if you make it that easy to get funding for any anonymous persons or groups to just create a webpage and be a part of the billion-dollar crypto market, you expose the novice investors to scammers and deceptive groups.
So how do we fix it? Do we need regulations, do we ban every ICO, or we just let the Game die on its own? What’s the solution?
If we we’re to talk about the importance of the blockchain technology and advancement for the future of not only the monetary system but also of a decentralized and trustworthy driven ecosystem we would understand that banning is not the way to go. Regulations are needed in the space without a doubt, probably all of us agree on that, but the problem comes when we see that the regulatory systems that need to provide us with the solution, have not found a way on how to classify the market as hole, not to mention the ICO game. They do understand that cryptocurrencies and the blockchain is needed for our own evolution but how do we classify it? Are they securities? Are they online assets? Until we will have the answer from the regulators that we pay to do that, what do we do? we just wait for months and years and let the market sink down more and more?
No, there are solutions, one of them is myICOPool.com that tries to be the intermediary between the participants in the ICO’s and the actual companies. By doing in depth research on each new project and eliminating the ones that show red flags they provide us with a platform that by pooling together with other participants will offer us the opportunity to get the best token bonuses available on the market. Let’s be honest, eliminating the scam ICO’s from the picture, at this point in time while the market is down even the best projects, don’t provide a reliable ROI investment opportunity by buying in at the ICO stage. Game rules have changed, we need to be in the presale and get the best bonuses on the top projects and eliminate the ones with no future.
The platform is easy to operate, and all the transactions to the ICO pools are recorded and available on the blockchain and also on the platform for the participants’ peace of mind and for future regulatory aspects. The team is reliable and trustworthy working hard on reviewing and making connections and partnerships with top new projects, and gaining more trust by day.