ICOs Flood The Market As Money Raised Drops

Investors’ appetites on Initial Coin Offerings appears to be on the decline in contrast to last year. Statistics released by ICO Data indicates that money raised from ICOs took a hit in the month of April. It is still unclear what might have caused the decline, considering that Initial Coin Offering space was buzzing with activity the better part of last year and in the first quarter of 2018.

ICO Fading Hype

However, that has not stopped people from speculating what might be the reason behind the slowdown. Regulatory uncertainty has been the biggest headache recently. This appears to have triggered fear among investors. A tax filing deadline last month might also have made it impossible for some people to invest in ICOs.

The possibility of investors losing interest in ICOs is also high. This could mostly be due to growing concerns that most ICOs are scams. A report by the Satis Group appears to have created a wave of concern after reporting nearly 80% of ICO projects launched last year have already collapsed.

Research by ICO Data indicates there was raising of $543 million towards ICO projects in April. That number representing a 44% decline compared to the previous month. The fall did not come as a surprise given a constant declining trend since the start of the year.

ICOs On The Rise

In contrast, 2017 was a good year for ICOs. There were launches of 871 ICO projects. December 2017 was the biggest month as more than $1.5 billion was raised. Amidst the decline in the amount of money being raised in ICOs, it appears the number of new ICO projects coming online is on the rise.

For instance, the total number of projects launched in the first four months of the year amount to 75% of the total number of projects launched the whole of last year. An increase in projects after a decrease in total fundraising continues to be concerning.

There is already talk that a good number of the new ICO projects are only there to scam unknowing investors. A high supply of ICO projects gunning for investor funds could lead to lower investor demand at a time of growing uncertainty over regulation.

Interest in ICOs remains high even though they are not raising the same amount of money. Investors appear to be switching attention to ICO projects whose products have potential to generate long-term value.