An independent study by Autonomous Research found that global ICO activity has fallen by more than 90% this year, and Ethereum price has fallen below $250. According to the company, ICO funds were about $3 billion at the beginning of this year, and the amount invested in September was less than $300 million.
ICO activity has fallen sharply
According to a study by Autonomous Research, ICO activity declined significantly in September. The company wrote:
Last month, ICO’s total financing reached $300 million, and in the previous month, the company’s total financing had exceeded $400 million, a far cry from the $2.4 billion in January this year. If we raise EOS coin and other similar Tokens, its high point will reach more than $3 billion, which means monthly ICO activity is reduced by 90%.
If you do not consider the “EOS and other similar Tokens” data, ICO’s financing amount has dropped by 88.53% from the previous month since January. Otherwise, the decline reached 90.7%. The company stressed: “We have started cleaning Tokens data from September, and this trend continues to decline.”
Founded in 2009, Autonomous Research is an independent research firm providing global investment research in the banking, investment, insurance, financial and information services industries. Autonomous Next is the company’s London-based business, focusing on “the impact of technology on the financial future.”
Investors lost interest in ICO
Autonomous Research pointed out three main reasons for the decline in ICO activity. “First, investors are less interested in buying generic Tokens like Tether tokens, instead they want to buy the same equity in the same company,” the company wrote. By examining “Pitchbook’s data on blockchain and bitcoin venture capital raising,” the company found that with the loss of capital, reaching more than $1 billion in August 2018, venture capital does have a lag effect.
The company believes that there are two reasons for this observation: “Financial technology companies like Robinhood and Revolut will turn to the direction of encryption technology and Bitmain tries to absorb funds before public offering.”
Safe Tokens Products (STO)
The second factor in the decline in ICO activity relates to secure Tokens products (STO). According to the US Securities and Exchange Commission (SEC), ICO may be a securities issue and is subject to its jurisdiction. “STO is the new ICO,” wrote blockchain consultant Michael K. Spencer, who detailed the “safety tokens are actual financial securities”.
Autonomous Research stressed that the investment in safe Tokens products has not yet fully developed, and stressed that due to poor supervision, STO will not enter the market for half a year in the next six months.
The company’s last reason was “the collapse and crisis of P2P loans in China since 2015, and whether this risk-seeking capital has emerged in the ICO.”
Although China is trying to close all cryptocurrencies and ICO service providers, ICO activities still exist. The People’s Bank of China (PBOC) disclosed last month that some of the cryptocurrency trading platforms initially set up in China have left China to operate overseas, such as Binance Exchange, but continue to provide services to domestic users. In August of this year, news.Bitcoin.com reported that P2P encryption loans are becoming more and more popular in China.