Binance Labs Director Ella Zhang told Bloomberg that, in his opinion, the current ICO market is a bubble. Zhang looks forward to the disappearance of it, as it would be a sign of the industry's maturing. The more investors dedicate funds to these projects, the more unreasonable the evaluations are.
"We want this bubble to break. There is too much hype and undue enthusiasm on the market, the ratings are far too big for reality. We really believe that the dissipation of this bubble is a positive sign for the future health of the industry, "Zhang said.
Although the Binance position may seem hypocritical, given that last year an ICO was also launched, it is true that the market for such projects had an explosive growth in 2018. In the first months of 2018, ICOs accumulated over $ 9 billion, largely due to EOS and Telegram projects.
Is the current ICO market a bubble?
According to the CoinSchedule site, during the year 2017, 870 projects raised about $ 6 billion. In the first 5 months of 2018, there have already been 400 ICOs. Statistically, the market does not seem to slow down, although regulatory authorities pay particular attention to these projects.
Despite the reluctance of this type of initiative, Binace has recently launched a $ 1 billion investment fund. He has already participated in the financing of four promising ICOs. Practically, the position of the representatives is due to the fact that there are too many misleading projects. They cause far more negative effects on the market than simple frauds.
Zhang said Binance, which is currently the world's largest trading volume, plans to run a program called "Community Governance Initiatives" (CGI). This program will have the role of identifying and delisting deceptive projects or not able to achieve what they promised.
"The main goal is to fight against scams and sh-t coins. So we will help to improve the crypto market and the adoption of blockchain technology, "explains Zhang.