By Platforms are still everything
Putting your money into a platform is perhaps one of the safest and easiest ways of making money from digital assets. In 2017, we saw the price of Ethereum rise from $8 in January to a peak of $1,400 in December, which is a value increase of 175x in a single year.
This value increase was due to a rise of 70% of ICOs launched on the Ethereum platform in 2017. This craze of ICOs will likely continue to surge in 2018, which will further the value of all platforms that launch ICOs.
The popularity of ICOs will continue but the platforms will change
The ICO craze took the crypto world by storm in 2017, delivering at least 3.5x more capital to blockchain startups than VC since 2017. Rightfully so, the ICO model can be seen as an improvement from the venture capital model. Both the investors and the founders win.
In this case, investors witness an increase of liquidity. When venture capitalists put a large amount of money in early stage businesses, their capital is generally locked up for 5-10 years with the hope of an extremely large payday. The benefit of token sales allows people to get instantaneous liquidity that allows them to move in and out of projects when they feel like it.
Founders get money and extra freedom to create the projects that they love. In general, startups were once forced to participate in Silicon Valley to get the needed investment from Venture Capitalists.
Today, token sales help to raise funds worldwide, which allow even everyday people to get into the action. Instead of founders surrendering ownership and answering questions of VCs, they get total ownership and are able to have smaller contributions from a large pool of investors.
While the craze of ICOs will likely to continue, there are really 3 predicts on the ICO market for 2018.
Pre-ICOs will fund more money than the ICOs themselves
If an ICO doesn’t sell out, the price tanks as soon as the tokens are tradeable. In order to minimize this risk, more projects are electing to sell a large percentage of their tokens for a discount during a “presale” period. These “pre-ICO” funds will mainly come from private investors and syndicate groups.
The leaders of these syndicates group their funds together and then set a discount price during the pre-sale period. The projects in these groups benefit through a cheaper fundraising process and their ICOs appear to be in higher demand as they are 50% sold out on day 1 of the ICO. Yet this is just another trick as most of the tokens were sold during the ICO at a huge discount.
Syndicate leaders can help the average person invest in ICOs at a discount, but it requires a huge amount of trust as they act as a custodian of your money.
ICOs will face a regulatory pushback
In 2017, China and Korea put a ban on ICOs, and the SEC declared that the majority of ICOs will be subject to US Securities laws with the failure to comply resulting in legal action. As time goes on, governments will take an increasingly intolerant stance towards ICOs in future.
As regulations increase, we’ll start to see an increase of arbitrage as ICOs will make use of countries that have more relaxed regulations, like Switzerland.
This pushback from governments and regulators could lead to a slowdown of the craze of ICOs but could lead to a stronger foundation of the market.
Top 2018 Cryptocurrency Trends Conclusion
Although no one has a crystal ball to see into the future, we can hedge against the uncertainty to limit the amount of risk we expose ourselves to whilst also maximizing our returns – which is what most crypto experts preach is de risking your investment and coming up with a strategy to pull out the principle if need be and play with profits using signals, news and insight to see what the future holds for crypto assets.
One thing is for certain: #buymorebitcoin should be trending more
Here’s a recap of everything to pay attention to in 2018:
- Platform protocols will continue their dominance over decentralized applications
- The landscape of initial coin offerings will evolve, this means you should pay careful attention to the presale process so you can reap the rewards
- Scalability of platforms like bitcoin and ethereum are a key focus (buy more bitcoin!)
- Security tokens could change the traditional finance model, making it a smart choice
- The barriers of entry for crypto will likely lower. This means that the short-term profits for these investments could increase, while the overall risk profile could rise. This means that investors are making less short-term positions and holding their coins over the long-term
With the market cap going over $800 Billion in January to all the way back down to the middle 200B cap and hovering in the 300B range currently, it will be fun to witness the growth and innovation that will come from the blockchain based internet and the utility it can bring the world, digital or physical.
Comments