Welcome to another edition of Crypto Trader News Roundtable where our editorial team gathers to talk about tips, trends, and issues in the digital ecosphere. Our topic of discussion is whether or not ICOs are dead.
Tony
Hello all!
We should talk about ICOs – are they over? Is it just a bad moment to launch one? What’s happening with ICOs/STOs? Are they 100% over or are blockchain startups just waiting for a bull market?
Dennis
That’s a great topic. Let’s break it down into a few sub questions.
- Have people stopped doing ICOs?
- Have people stopped investing in ICOs?
- What should projects be doing in this market?
- What do we foresee for the rest of 2019?
I don’t think projects have stopped TRYING to do ICOs, but obviously they’re having a lot harder time of it.
Alan
- ICO watchlist shows 1 or 2 that were just live. I think Celer Token ICO just happened or is about to happen.
- People have not stopped investing in ICO’s, BTT (Bittorrent) was oversubscribed. I think there’s a few out there still.
Tony
Well we can for sure say that there are companies that were planning on conducting an ICO that have taken a step back due to current market conditions.
Alan
I know of a project or two who have postponed their ICO until the bulls are back, but there are definitely still projects out there going ahead, bear market and all.
Tony
Mainly because they know that investors don’t want to sell their crypto at this price having witnessed BTC go up to 19K.
Alan
I think we can also state that people still have not stopped investing in ICOs because they’re still trading and investing in alt coins; not top 100, but others on CMC.
Meredith
I think ICOs are definitely on the to-do list for a lot of companies. The potential to make a lot of money is just too tempting. Perhaps they’re stepping back for market conditions, but I think a lot has to do with building trust and making sure they are being transparent. The legit companies shouldn’t have a problem with that.
Dennis
So for question 2, I think it’s obviously slowed down. Like Tony said, people are hesitant to part with their tokens at these prices. That being said, I think the fact that so many people have been burned by less than positive results is probably hurting more than the market prices.
There’s also the problem with regulations – the days of “it’s a utility token” are quickly coming to an end.
If it walks like a duck, quacks like a duck and flies like a duck… chances are it’s a duck.
And almost ALL ICOs probably should have been considered as securities.
Meredith
My answer for 2 is that I don’t think people have stopped investing. Hopefully they are being a little more responsible with their money. Then again, there are a lot of people who got burnt and the idea of ICOs is quite sour for them.
Tony
I feel like “people” have indeed stopped investing, or at least your average middle-class person who was looking to invest 20K into a blockchain startup. There are obviously still funds and pools that put money into startups.
Alan
I think, given the opportunity, if the same mechanics were there, (if I invest today my coin might moon), there’d be interest. No bull market not enough casino players.
Tony
But I remember last year having a ton of people knocking on my door to put in 10K, 20K, 30K… 100K into a certain project.
Dennis
Maybe that’s the truth of the situation – funds are moving slowly, because of the value of the market and individuals are moving slowly because of that AND that they’ve been burnt.
Meredith
I don’t know, Tony… I think it’s human nature to want an easy road and investing early and the potential to make 1000x their investment might be too hard to resist.
Tony
This isn’t happening anymore. People know that this is just a horrible time to spend your crypto… I feel like we need to wait for a more bullish market and people wont be so resistant to invest.
Alan
But in answer to what should projects be doing now? They should be shipping and proving themselves.
Tony
Exactly, Alan, particularly the ones who got funded last year – and interestingly enough most of them aren’t.
Meredith
I agree, Alan. Apple was built out of a garage. LOL
Dennis
Projects that haven’t been funded can’t really ship.
Alan
I think we can foresee more projects shipping products in 2019. The one’s who got funded in 2017-2018 for sure.
Projects that haven’t been funded can ship, just at a slower pace.
Dennis
I think too many of them are shipping cases of Bacardi to beaches in South America.
Tony
So sad, but so true.
Dennis
What project founders need to be doing is homework – they need to be able to build out a credible proposition that convinces. They need to concentrate on entrepreneurial skills – business plans, revenue streams, marketing plans
if they are going to be considered as securities, they need to develop the tools that companies use to effectively communicate with stakeholders. A cool product idea just isn’t going to cut it.
Meredith
Sure. Just like any traditional seed funding initiative. I guess ICOs have to evolve. I don’t know anyone that NEEDS 30 million for up-front development.
Dennis
So true. If they’re serious about building something they should be able to start off small and PROVE that they’re capable business leaders as well as tech visionaries.
Meredith
Get a little for development. Show real progress. Ask for more funding for the next phase.
Like you often say, Dennis. They have to show accountability
Dennis
Not just for development. Every business has four pillars: product, sales/marketing, HR and administration – product is often NOT the most important. But how many ICOs have constructed solid projects on all four fronts?
Answer: Very few – and that needs to change.
Meredith
That would surprise a lot of people. Product isn’t everything. The perception and the warm fuzzies about the product is EVERYTHING.
Dennis
You just need to look at a McDonald’s hamburger to realize that product is WAY down the list.
Alan
Sure, there’s a lot of Bacardi shipping but there’s real work happening as well. I think Binance is doing interesting work apart from their exchange. Consensys, Medici Ventures, etc. I think we’re still at the foundational level.
You’re right. Sales, then product.
Sales, Distribution, Product.
Dennis
Start with team.
Meredith
Yup. Just look at the perception of generic anything compared to name brand. Yes, sometimes quality is better. Oftentimes it’s not. We got off to a marketing tangent.
Dennis
Actually it’s not a tangent – ICOs are ALL about marketing but they have to be viewed holistically.
Tony
So, what do we foresee for 2019? I feel like it’s going to be pretty much like this until prices start going up again.
Dennis
We’re three months into the year and it’s pretty much been sideways.
Getting in on promising new projects is probably one of the few ways to make money in this market, but it’s a much more uphill battle now. A year ago, everybody and their grandma wanted to do an ICO – and pretty much did.
In my opinion, this is exactly what the industry needs.
Alan
Sideways is good. Sideways shows stability. Focus on the fundamentals in the meantime. Do work.
Dennis
We need to weed out the riff-raff that are just looking to raise a quick buck and concentrate lower sums of money in serious projects.
Meredith
I think investors and project developers have to maintain patience. Be transparent. Show real progress. Stop the greedy money grab. It’s too tempting to take the money and run.
Dennis
So do we all believe there’s a future for ICOs?
Tony
Yes, under the right circumstances.
“ICO”, “Crowdfunding”… there’s no difference. There’s always people willing to collectively put money into something they find valuable.
Meredith
I think for marketing purposes, it’s going to have a new name but with the same concept. ICO leaves a bad taste anymore. Hopefully ICO 2.0 investors will be a little smarter about who and what they’re throwing their money at – and demand more proof of work.
Dennis
It’s always going to be risky. Yesterday I spoke with someone who told me, “my associates and I backed more than 30 projects last year. Only three have created a product or even a prototype.”
On face value, that’s pretty sad, but the truth is if even one of them is a success then the other 29 won’t have mattered.
Meredith
Ouch! Well, if they have that kind of money they can throw some my way… I promise not to deliver anything. Transparency at its finest. Ha ha.
Alan
How did they back them, as a firm or as individuals?
Dennis
I think they’re a small pool, but I could be wrong.
Most startups fail. All we can reasonably expect is that if they fail it’s not because they were spending our money on Piña Coladas.
Meredith
True that!
Dennis
That being said, this industry has SO MUCH to offer that its imperative that we push forward the best projects and back the honest entrepreneurs who sincerely want to make a difference. Many will fail, but some will succeed, and those that fail will learn, but the mindset needs to change.
Meredith
I wonder if looking at established companies who hope to launch their own blockchain for immutable recordkeeping and transparency would be where I’d look for investment options. At least they have a history of being in business.
Dennis
We need CRYPTOPRENEURS instead of just blockchain tech enthusiasts!