Here’s Why ICOs Are Turning out Impressive Figures Despite Challenges
The first quarter of 2018 has been quite a dramatic period in the life of blockchain and cryptocurrencies. While we see a continuous drop in the price of Bitcoin and altcoins in general, with most tokens trading even below their ICO prices, there has been no relenting in the amount of money raised during this period.
The end of February saw crowdfunding ventures raise over $1 Billion dollars for the third month running. Of the billions raised this year, $788 million has come from projects based in the U.S., $265 million from China, and $249 million from Lithuania. Switzerland, Europe’s crowdsale heartland, is fourth with $249 million. The above figures reveal that there is a reasonable spread in the way these funds are raised, portraying a somewhat balanced ecosystem.
Despite the political and institutional resistances faced by the cryptocurrency ecosystem, with specific attention paid to ICOs, this stable upward trend that is observed raises some curiosity. Questions about the fundamental indices behind the rising trend if ICO expansion abound as well as the sustainability of current behaviour of the industry.
Overall Quality of ICOs
The Founder of LKI Consulting, a PR firm that has handled several ICOs especially in the last couple of months, Laura Kornelija Inamedinova believes that the reason for this ICO trend must be related to the increase in the overall quality of ICOs. She recalls the situation which existed in this industry around six months ago, where probably anyone could announce an ICO, as basically all what people needed was a nice and attractive idea and technological mindset or competence in business and digital innovations were considered as the second-tier subjects.
Inamedinova explains that time has shown that on the contrary, these aspects are the most important in order to have a successful ICO. Therefore, the increase in the number of high-quality and well-developed projects contributes to the growing confidence of investors.
Although in general the ICO market has boomed and recorded impressive figures, there are a good number of projects that have not succeeded in achieving there set-out objective, hence are regarded as unsuccessful. Inamedinova identifies knowledge and communication as the major factors that determines how successful a project can be.
Inamedinova tells CCN:
“A successful ICO definitely requires the team which has an excellent knowledge in business and tech. On the other hand, communication is still a bit underrated, but it is as important as the understanding of particular industries. A good communication strategy always helps in displaying the best features of your project, as well as in attracting more people through creative campaigns. Also, the way that team members communicate with investors can tell a lot about the reliability of any ICO. The unsuccessful ones tend to be vague and even rude, what obviously indicates a quite flawed strategy.”
The first major wave of announcing ICOs started in the summer of 2017. Regarding the nature of these projects, the first results will be visible in a year or two after the fundraising process, hence this could be between six to eighteen months from the time of writing. It will not be a surprise that most of the projects can fail (unfortunately, it is a pretty usual thing in the world of startups and innovations) and the mass disappointment will grow. However it turns out, interested people will not stop establishing new projects which will be significantly improved and definitely more successful. Eventually, blockchain technology will be expected to become massively applied not only in ICOs, but startups, corporations and even public sector would eventually adapt and widely use it due to safety and convenience.