Brian Kelly, founder, and CEO of the digital investment firm BKCM LLC is of the view that ICOs are not going anywhere though they are held to a higher standard moving forward.
Immature ICOs have no place in the market
Kelly during a recent interview stated that the days of ICOs coming out of nowhere to million-dollar valuations is over. According to him, the ICO and cryptocurrency markets have moved to a more mature view of the innovative funding cycle.
This move will see ICOs held to a higher standard than they were a few months ago. The new approach has been forced onto the market due to the nature of the market which has been in a bear cycle since the start of the year.
The cryptocurrency market was expected to be flushed with Cash following the rise of Bitcoin last year but investors have instead taken a spare approach to the market.
Investors now have fears concerning the price of crypto at the start of an ICO buy-in versus the price when the coins are actually released on the market.
The CNBC analyst added that ICOs remain an effective tool for raising funds for blockchain and cryptocurrency projects. However, the days when ICOs would just present a whitepaper and raise millions of dollars is over.
He further talked about how to review projects when considering investing in any of them.
He advised investors to look out for factors such as promoting activities that will increase network adoption, as well as having a strong presence in industry catalysts such as conferences.
He isn’t the only one who believes that ICOs are here to stay. Thomas Zeeb, CEO of securities services at Switzerland’s top stock exchange SIX is of the view that ICOs are not going anywhere.
He also predicted that mass adoption would take place over the next five years.
ICO market drops despite record funds raised this year
A research conducted by the Boston College Carroll School of Management found that over half of all ICOs die within the first four months of reaching the market.
This revelation comes as a shock to many as the ICO market attained a new high this year.
Data pulled from ICORating shows that in the second quarter of the year, 27 projects raised over $8 billion in funding, which is nearly $5 billion higher than what was raised in the first quarter.
The capital raised from ICOs this year has nearly doubled than what was raised last year, but there has been a decline over the past few months.
In August, the ICO market hit a low, with only $200 million raised during the month.