Denis’ Crypto Thoughts: Are ICOs dead?

Oct 10, 2018 · 3 min read

by Denis Vinokourov

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Almost every day there is a new article claiming that the ICO market is well and truly dead. However, before making such claims one must acknowledge that most token sale statistics available online rely on third-party reporting, the fact remains that despite the apparent maturing of the market there is still no single source that provides 100% accurate representation of the fundraising activity. Furthermore, one must also bear in mind the three giant ICOs that took place this year, EOS which raised $4.2bn, Telegram with its $1.7bn raised and Tatatu, which raised $575m. This alone counts for a sizeable fundraising effort and yet it has done more damage to the Ethereum’s reputation given the apparent aggressive liquidation of the raised ETH.

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Despite the critique of the market, the above data actually shows that the market is far from dead and is, in fact, undergoing a maturity phase. The spike in June is linked to the eagerly awaited conclusion of the giant ICO that is EOS and, while the summer period was subjected to usual seasonality impact as market participants take the time off, activity for the month of September rebounded strongly to closely match early 2018 levels. The sought-after astronomic returns are certainly harder to achieve, especially during the bear market, but to say that there is a glut of issuance is outright wrong. Something that early adopters have been openly criticising is that early participation in ICOs is now more or less limited to participants that are more professional in nature and a lot of ICOs are pre-sold during these early stages, only a fraction is left for public participation.

As the market matures, so should the exchanges and service providers, but the truth is that a number of these vendors still prefer to operate in a way that limits their responsibility to the end user of the platform. An obvious question is, does the market need more crypto exchanges? And the answer is no, and that would be the case only if the already established providers step up to the responsibility of ensuring the quality of service that users expect from the more traditional trading vendors, whether that is CMC Markets, IG Index and many others that are out there. The reality is that many crypto vendors still turn a blind eye on proper KYC and AML policy, users are constantly wary of potential hacks and the usability of the platform is far from intuitive.

Breaking into the ranks as a top crypto exchange is no easy task and while the team at BlockEx faced a number of challenges along the way, it stayed true to its purpose of bridging the gap between the crypto and traditional capital markets. Everything from the onboarding process to decisions behind ICO listing is done with users in mind, to ensure the safety of their funds, security of their data and to provide a set of trading tools that matches institutional requirements. Even the special ICO round for DAXT holders is there to ensure access to projects that would otherwise be limited to a select few. There is plenty of work to be done but there is also a lot to celebrate and an easy way out would be to loosen all the controls that have been meticulously put in place and turn a blind eye on washing trading and other illicit activities that still prevail across the market. However remember this, regulation is coming, it is a matter of when and not if, and when it comes, market vendors better be on the right side of the fence to survive and ensure access to new and also established ICOs.

Quick buck ICOs are dead…long live the mature market ICO market.

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