Mar 25, 2019 15:30 UTC
Mar 25, 2019 at 15:36 UTC
Are ICOs Going Out Of Trend?
Have you been asking yourself whether or not ICOs are going out of trend, because if you have, you are definitely not the only one.
If you still do not know what an ICO is, perhaps you a look at our piece titled What Is Initial Coin Offering (ICO)?
With the cryptocurrency market being more volatile than ever, a lot of people are indeed wondering whether or not ICOs are finally dead. Is the ICO trend really over? Let’s find out.
Recently, a lot of experts have been expressing their opinions on the state of ICO market. Michael Novogratz, founder, CEO and chairman of Galaxy Digital, told Bloomberg towards the end of 2018 that
“The ICO market is pretty much dead right now.”
So should we indeed write off this massive trend that was so popular in 2018?
You may also read: Who Holds the Future of ICOs | Regulators v/s Innovators
Is The ICO Trend Finally Over?
Well, to put it simply, the trend might not be over just yet, but it has definitely evolved. The statistics show that the ICO trend may have given out, but it is being replaced by STOs or Security Token Offerings.
Google search analytics show that over the past year, the interest for the keyword ‘ICO’ has fallen drastically. However, inversely proportional to that, the search rate for STOs has shot up.
For those wondering what an STO is, it encompasses financial securities that are issued as digital assets. These digital assets represent proprietary rights in a firm.
With ICOs, once you have possession of the tokens, you are assured that you have a stake in the firm. With STOs however, since it is not a utility token, they do not represent any stake in the firm. STOs can only be used once a project is executed successfully to its launch.
You may also read: Are ICOs Dead in 2019?
How Are STOs Overwhelming The ICO Market?
With STOs, the risk factor gets diminished greatly. Think about it, the only function of ICOs is to rake in the revenues, but that does not in any wayassure returns on the tokens if the project does not work out.
On the other hand, Security Token Offerings ensure that the securities offered are not only transparent and transferable but also liquid. Hence, they are a much low-risk gamble to take than an ICO.
STOs however too are not invincible. If the regulators suddenly decide to tighten their hold, then the STO market can be greatly influenced as well, for better or for worse.
We just need to wait and see if the STO market will be wiping out the ICO market completely in 2019.
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