Morning Report: Cryptos are booming but ICOs look weak. What’s going on?
In recent days, the aggregate value of crypto assets — currencies, tokens, and the like — spiked to over $300 billion before retreating. Given that massive boom in value and consumer interest in bitcoin, ether, and other popular crypto products, you might presume that the ICO market must also be booming.
It’s not. An ICO, or initial coin offering, is a method through which entrepreneurs collect liquid cryptos and regular currency in exchange for new tokens on often yet-to-be-built networks that will apply blockchain tech to something new, like bodega cats, or false teeth.
(General 2017 maxim: If you can put the word in front of “blockchain,” it must be better with blockchain. Trust me; I read the white paper.)
According to CoinSchedule, completed ICOs in November are down sharply from preceding months. I expect the November result to perk up at least some, but this isn’t much to work with:
To be clear, ICOs are not over. While there is a lot of crypto paper gains to be spent, those owners will be on the hunt for the next big return. After all, if you just enjoyed the crypto bull market of 2017, you aren’t going to turn around and be content to collect pedestrian returns from slow-moving things like “stocks” or “bonds” or “general asset diversification for the mitigation of short-term risk while allowing for long-term growth.”
Of course not.
So as long as there are new things to blockchain, the ICO market will rub along somehow. Perhaps in the stunted form that we see above.
All this is to say that the boom in the value of the most popular blockchains and tokens (bitcoin, ethereum, et al.) isn’t dragging the ICO market up with it—at least right now. That might prevent a few people from losing their shirts.
From The Crunchbase Daily:
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iStockPhoto / Jane_Kelly
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