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Investors expect more ICO launches as the event season is in full swing, marking a turning point in digital asset fundraising.
The upcoming ICO boom landscape will begin to resemble the traditional financial ecosystem, with a rise in the number of big ticket investors, including large institutions like BlackRock and Fidelity, making increasingly large commitments to digital assets.
This time, advancements in real-world asset tokenization, DePIN and AI decentralized physical infrastructure, and new developments in DeFi such as layer-2s and ZK rollups will lead the fundraising surge.
The Crypto World Has Learned From Its Failures
The events of 2022 led to many high-profile investors losing money in projects like FTX and Celsius, which appeared legitimate on the surface. The cryptocurrency industry is still reeling from the losses suffered in those years, reflected by the hesitation in investors to dive headfirst into another round of irresponsible fundraising.
Moreover, it is also evident that the ICO boom of 2018 was a complete failure. It happened with little due diligence being done as VC funds threw money at various projects.
Over $7 Billion was invested in ICOs in 2018, often based on a single conversation at a cryptocurrency party. Unfortunately, the stories that stuck were the frauds that made ICOs synonymous with scams.
One of the most famous was the Bitconnect Ponzi scheme, which promised high returns but ultimately left investors with losses of $2.4 Billion. It’s no wonder that as a new bull market approaches, there is still some caution around ICOs.
ICO Boom Is On The Horizon
Despite this caution, however, a new ICO boom is on the horizon. There are signs of a resurgence, with CryptoRank reporting a two-year high in monthly token sales and RootData reporting a 52% increase in VC investment in crypto projects between February and March.
However, the lessons investors learned in 2018 mean that the new projects seeking funding will face much greater scrutiny from both investors and regulators. As a result, there will be a much higher survival rate and fewer monetary losses. The next ICO boom will be more organized and follow stricter due diligence policies.
VCs Are More Cautious Than Ever
VCs today have become much more discerning, requiring a well-fleshed-out whitepaper with strong numbers and reliable revenue projections before committing their capital. The days of approaching an investor with a business plan scribbled on a napkin are long gone.
This time around, ICOs will be conducted much differently from what investors saw in 2018. Additionally, due diligence, compliance, investor accessibility, and reliable returns will be the priorities.
However, as the bull market continues to accelerate, investors may still see a rise in scams and rug pulls. These are likely to continue investing, albeit through different vehicles including the meme coin frenzy, among other new innovative avenues.
Summary
As more institutional investors like BlackRock and Fidelity enter the ICO market, caution remains due to scams like the Bitconnect Ponzi scheme. The new ICO landscape will prioritize due diligence, compliance, accessibility, and reliable returns. However, investors may still encounter scams and rug pulls as the bull market continues, such as with the recent meme coin frenzy.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, s or related indexes comes with a risk of financial loss.
Amanda Shinoy is one of the few women in the space invested knee-deep in crypto. An advocate for increasing the presence of women in crypto, she is known for her accurate technical analysis and price prediction of cryptocurrencies. Readers are often waiting for her opinion about the next rally. She is a finance expert with an MBA in finance. Quitting a corporate job at a leading financial institution, she now engages herself full-time into financial education for the general public.
