ICOs Could Peter Out Soon as Market Focus Shifts to STOs

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By Maud Guon Mar 05, 2019
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ICOs have shown no signs of coming out of their doldrums, especially as regulations tighten around the globe and market focus gradually shifts to STOs.

ICOs Appear to Dwindle

ICO funding hit a new low this February. It is clear that the recent broad-based rally in major cryptocurrencies has not become a boon for ICOs.

According to a report by blockchain news aggregator Interchain Pulse, ICO funding dropped below $100 million in February of 2019, down a massive 95.78% year on year.

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(Source: Interchain Pulse; ICORating)

As of March 4, 2019, the ICO funding of February was a mere $56 million, falling by 61.64% from $146 million in January. Last February saw an ICO funding of $1.329 billion, nearly 24 times that of this February. The sum of ICO funding in the first two months of 2019 was a little bitter higher ($6 million) than last December when the figure hit its lowest level in 2018.

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(Source: Interchain Pulse; ICORating)

ICOs have continued their downward trend for quite a long time. ICO funding seems to go from bad to worse since the crash occurred in the second half of 2018.

Tightening Regulations on ICOs

Back in early January, Philippine securities regulator rolled out a new regulatory framework to guide digital asset token offering. In mid-February, the U.S. Federal Bureau of Investigation (FBI) outlined major features of scam ICOs, warning investors of possible financial risks.

The Securities and Exchange Commission (SEC) announced 10 investment tips for 2019, in which the watchdog called attention to the legality of ICOs.

The growth of security token offering (STOs) serves as a strong headwind for ICOs.

As Cryptonews Hub previously reported, a report by Goldman Sachs-backed crypto finance company Circle highlighted four main crypto trends to watch in the new year, mentioning that the market focus is expected to shift to security tokens in 2019.

A recent research report by CoinSchedule showed that investors have got cold feet about ICOs, as the investor interest dropped by a huge 95% over the past year.

The report also pointed out that the number of ICOs has dropped dramatically in 2019, with investor interest gradually shifting to STOs.

Meanwhile, according to data compiled by ICObench, 88% of ICO projects accepted ETH as payment over their previous rounds of capital raising. As ETH has seen a slump in the price over the past months, the market is supposed to see a big change in the amount of ICO funding.

Cryptonews Hub is an emerging blockchain media and information services company specializing in crypto assets. Its team of experts is committed to editorial independence and journalistic professionalism, providing key insights on the latest developments involving cryptocurrency regulations around the world and innovations in blockchain technology.
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