Whilst it appears that the number of ICOs coming to market is increasing unabated, there are signs that the total value of funds raised in the month of November have undertaken a significant drop in comparison to the month of October.
ICO Fatigue?
The figures, compiled by CoinSchedule, appear to indicate a significant year-end drop in investor contributions for Blockchain-based start-ups engaging in Initial Coin Offerings as a means for raising their project capital.
Whilst ICOs as a concept are thought to date back to at least 2013, it was in 2017 that their numbers underwent an exponential explosion with year-to-date figures for ICO fund-raising standing at $3.6 billion dollars in comparison to a much more modest $96 million for the entire year of 2016 – more than a thirty-fold increase with 2017 still having just over fives weeks to run in its calendar.
The final year-end figure, however, may not climb significantly higher from its current level as the combined sums reaped for the month of November straggle at just over 10% (as of writing, November 25th) of the figure brought in during the entire month of October.
Cases of Fraud Making an Impact
The growing number of cases of fraud, such as the alleged Confido scam, may be one of the more important factors in the declining numbers. Seasonal factors seem unlikely to be playing a part as the corresponding statistics for 2016 show that the month of November had demonstrated a significant spurt on the previous month. Statistics for previous years are unavailable.
Whilst no official figures are collated on the instance of fraud within the ICO space, cases such as Tezos which have been receiving high profile media attention may be rendering potential investors more reticent to invest.
High profile figures have also been drawing attention to the risks posed with both Wikipedia founder Jimmy Wales and one-time fraudster Jordan Belfort both referring to ICOs as a blanket scam.
The drop in numbers is being welcomed in some quarters as a possible sign of increasing investor maturity which will oblige new ICO ventures to demonstrate higher levels of pre-commitment to their proposed ventures before turning to the public for non-secured capital.
Malachy has a background in Mathematics and Computer Science, and worked for ten years in the Fintech field before leaving to found ICOExaminer. Having first learned of Bitcoin in 2014, he subsequently read Andreas Antonopolous' classic Mastering Bitcoin in 2015 to see how things worked under the hood, and has since been hooked to the whole cryptocurrency phenomenon
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