The ICO market is still in its early stages yet there is a great deal of fervour encompassing it as experts see in it a driver to change the whole financial ecosystem.
According to data compiled by GP Bullhound, the value of ICO funding increased from five million U.S. dollars in 2015 to 4.04 billion U.S. dollars in 2017. Data from Statista show that last February about 197 million U.S. dollars were raised for ICO projects worldwide while, as of March 2018, 13% of the cryptocurrency ICO projects were launched in the finance industry.
However, on the flip side of such enthusiasm there are criticisms as according to a recent report less than 4% of all initial coin offerings are a success and more than 80% of ICOs are scams.
Oliver* caught up with the founder of the ICO, J.R. Willett to explore more about current trends and future challenges.
OLIVER*: Hi J.R. and thank you for joining us.
J.R.: Hi Oliver*, thank you for having me.
O*: J.R., what are the main trends in the ICO market from your perspective?
J.R.: The market is becoming much noisier – a great idea now needs a ton of marketing help because there are so many ICOs happening. There was a short window where just the idea alone was enough.
O*: What are the main regulatory challenges?
J.R.: The existing system is built to protect numerous vested interests, which mainly results in only rich people having access to the most promising high risk high reward investments. This is ultimately NOT about protecting the consumer so much as protecting the status quo – the rich get richer. I do not expect the regulation to get lighter – I expect it to crack down as existing interests pressure the regulators to protect their domains.
O*: Investor wise, some argue ICO are a sort of lottery. What can be done to protect non-professional investors?
J.R.: The right thing to do would be to allow people to play the lottery if they want, and prosecute people who deliberately deceive others. The difference between ICOs and the lottery is that the odds can be in your favor if you do your homework on ICOs, but the odds are NEVER in your favor playing the lottery. That’s a big difference! However, what should happen is very different from what will happen.
O*: How manipulated is the crypto market, as far as you know?
J.R.: For small, illiquid coins and tokens, I suspect a high degree of manipulation is possible and is probably common. For the big coins, I do not at all buy the theory that they are being manipulated. I’m sure some people would love to manipulate them, but they are just too large for that.
O*: How will the industry evolve over the next years?
J.R.: I expect ICOs to be increasingly persecuted by regulators, with the result that many legitimate actors are forced out of the space, leaving more and more scammers operating anonymously or from jurisdictions where they cannot easily be reached by the U.S. government, leading to the accusations against ICOs being a self-fulfilling prophecy.
O*: What are you working on? What’s next for you?
J.R.: I’m currently focused on crypto ATMs, which I am convinced are key to bringing crypto to the poor unwashed masses, especially in the third world. I think cryptocurrency will ultimately make massive wealth disparities, and I’m trying to cushion that blow to society by spreading cryptocurrencies as widely as possible.