Initial Coin Offerings

PWC: Twice as many ICOs are now a success but the trend is shifting

A recent report by PWC indicates that twice as many STOs and ICOs are now a success. After analysing the ICOs and STOs markets in 2017 and 2018, they concluded that more projects got delivered in 2018.

Many ICOs are now a success.

According to the report, in the second half of 2018, the number of ICOs declined due to the slowdown in the market and the current switch by investors from ICOs to STOs. Nevertheless, there were more successful projects within this period as compared to the projects carried out in 2017.

The shift from ICOs to STOs is due to the regulated frame work surrounding STOs, something which is still a gray area when it comes to ICOs. However, the ICOs of EOS and Telegram both raised a combine $5.8 billion in 2018.

“The trend demonstrates that from an investment strategy perspective, ICOs or STOs remain attractive to investors for venture capital financing. However, there is a process of rethinking in favor of more security and transparency for investors” Daniel Diemens Blockchain Lead EMEA at PWC

The report outlines the fact that STOs are gaining increasing popularity among investors, though cryptocurrency investments have declined significantly due to the “crypto winter” the global crypto community is facing.

There is also a growing trend in tokenization of assets like commodities (gold, oil etc.) and the tokenization of other intangible goods like music rights.

However, they believe increased protection is highly needed in the market as market participants demand new services such as flexible custody solutions, market data services, reliable rating services and research.

“ICOs have often been designed as highly speculative vehicles and have attracted the attention of regulators. Improved regulation through the tokenization and recognition as securities is another step towards maturity. It is interesting to see how the industry has changed in such a short time and what business models will result or which will prevail.” Daniel said.

However, some established stock exchanges and financial institutions have identified the need as well and are expanding their services within the space.

For example, the Swiss stock exchange operator, SIX, announced in the summer of 2018 a platform for the issuance, trading, settlement and custody of digital assets. Another Swiss bank was authorized in January 2019 to become the first global crypto custodian bank.

Nasdaq has also recently been active within the crypto space. They recently indicated their interest to add Bitcoin and Ethereum indices after leading a series B funding of $2 million for Symbiont, an enterprise blockchain startup.

Twice as many ICOs are now a success but can we expect this trend to continue through 2019?

Let’s know what you think.


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