More money was raised via ICOs in Q1 than all of 2017 combined and the average raise has doubled that of Q4 2017
While it is undeniable that the media has moved on from the talk of cryptocurrency or an ICO bubble, a CoinDesk Report just produced one of the more “here is some perspective” statistics we’ve seen in awhile.
According to, ‘The State of the Blockchain‘, the total amount of money raised via token sale increased by 113X between March 2017 and March 2018.
Not 113 per cent, 113 times over. In March 2017, US$19 million was raised via ICO. Im March 2018, the number was US$2.16 billion. That was created by a total deals growth from 5 to 64.
Furthermore, there are additional signs that 2018 should blow 2017 out of the water when it comes to ICOs. By one statistic (albeit buoyed by Telegram) 2018 has already beaten 2017. In Q1 2018 the total amount of money raised by ICO was US$6.3 billion — a number that is higher than the US$5.4 billion raised in all of 2017.
Plus, the average raise in Q1 2018 was US$31 million as compared to US$16 million to end 2017.
The diversity of platforms being used to facilitate ICOs is also growing, which suggests the types of companies pursuing the fundraising strategy is also diversifying. At the moment, Waves (a do-everything solution) is the most popular protocol but NEO (for enterprises) and Stellar (for finance) are also popular.
Now, some expectations should be tempered. First and foremost, a lot of these numbers may be driven by the Telegram deal and it would not be surprising if these numbers came down in Q2.
Furthermore, since December the number of deals have declined from 78 to 64. That being said, the total amount raised increased from US$1.4 billion in December to US$2.2 billion in March.
VC funding remains a small minority of blockchain-based deals. While it continued to climb from January to March (US$156 million in January, US$227 in February and US$503 million in March), it still only represents 12 per cent of money invested in blockchain-based companies.
To highlight this point, the world’s three largest VC rounds were a US$350 deal in Robinhood, US$75 million for Ledger and US$61 million for DFINITY. By comparison, the largest ICO was the Telegram token offering at US$1.7 billion, a US$320 million sale by Dragon and a US$300 million ICO by HOUBI.
So while traditional tech investors are expressing interest and support of blockchain, they are being swamped by a token-sale tidal wave.
The state of Cryptocurrencies
The price of cryptocurrencies have been stuck in the mud for most of 2018. While there was a significant price drop at the turn of the year, the price of Bitcoin in 2018 has essentially fluctuated between US$8,000 and US$10,000 with some peaks and dips here and there.
Total market cap for the major cryptocurrencies dropped by 58 per cent over Q1 and in March stood at US$348 billion.
Not surprisingly, this has resulted in a drop in trading volume and the reassertion of Bitcoin as the dominant player in the market.
Every major coin has become pegged to Bitcoin, and in Q1 2018 the trend was more pronounced. Price charts for Ethereum, Litecoin, Bitcoin Cash and Ripple all closely follow Bitcoin.
Ripple did see the most extreme price drop at -78 per cent while Ethereum saw the lowest drop-off at -48 per cent. Bitcoin lost 51 per cent of its value in Q1 2018.
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When CoinDesk theorised the ‘Why’ of the bear market, they suggested US tax season may have been to blame as well as a significant drop in on-chain transactions (sending Bitcoin-for-pizza).
However, the most interesting hypothesis was a cool acceptance by traditional merchants. For cryptocurrencies to truly dominate the globe, they need to be used to pay for everyday items quickly and easily.
As of Q1 2018, that is simply not happening. The amount of merchants accepting cryptocurrencies dropped by over 20 per cent in January and nearly 40 per cent in February. March saw a slight uptick but overall the quarter saw less merchants accepting cryptos than the year before.
One major event was the news that Stripe would stop accepting Bitcoin in April. Furthermore, according to the report, Morgan Stanely said “Bitcoin acceptance is virtually zero and shrinking”.
If merchants continue to shy away from accepting cryptocurrencies, it’s hard to imagine the price rising much beyond its current value.
Now to end on a fun note. For people who want to make money mining, they should probably move to Trinidad and Tobago while avoiding South Korea like the plague.
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