September 18, 2019 by Victor
The winter of crypto has been marked by the gradual decline of investments in ICO, and this for regulatory reasons but also by the rise of new systems of collection that are deemed more secure. Recently, a report for the month of August 2019, has highlighted the general state of the ICO and announces a recession of 81% compared to the same period in 2018.
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A market is essentially speculative
Compared to last year, the ICO has experienced a recession, unprecedented 81%. This figure seems to coincide with the recurrence of blockages, legal and regulatory as well as technical failures but not that !
In practice, a false interpretation has spread in the calculations estimates of the crypto-enterprises, according to which their shareholdings massive in the ICO would bring them to a collection of funds considerably in the years to 2017. However, this method of raising funds remained, however, a speculative bubble that was soon to explode.
In fact, the startup issuers making an ICO have neglected an important variable in the evaluation of their project, namely, a correct estimate of the profitability. The overestimation of such returns has misled investors while the majority of projects achieving an ICO were doomed to a failure resulting in the loss of several billion dollars of invested funds.
The IEO ahead of the ICO
The market collapse of the ICO is partially motivated by the lack of support for investors in case of fraud. The Securities and Exchange Commission of the United States has managed, however, to identify case of violation related to the STO (Security Token Offering), in particular for the omission of the records and adjustments, without covering the bulk of the funds lost.
On the other hand, the ICO will lose speed with the rise in power of the Initial Exchange Offering (IEO). The difference between these two methods of fund raising lies in the accountability of crypto-exchanges in the course of the IEO, eliminating the risk of exit scam (scam to the output).
Today, this method of collection occupies 37% of the total fund raising through the sale of tokens, as against 1 per cent in 2018.
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