The big winner this week continues to be Bitcoin, rising 9% from $5,500 to around $6,000. This is at the expense of other cryptocurrencies, causing Ether to drop by 6% to $305. It looks like the capital inflow of Bitcoin is fueled by people selling off altcoins.
As a result of the capital flight, tokens and ICOs are performing poorly in recent weeks. Even anticipated projects such as AirSwap and Request are at below ICO price shortly after trading. There are a lot of uncertainties now, so we want to share our thoughts on the state of ICOs.
State of ICOs
As more and more people are experienced with ICOs, it is becoming much harder to flip for a quick profit comparing to just 2-3 months ago.
There are a few reasons contributing to this:
-Too many ICOs coming out every day, which makes it hard for a project to stand out and attract attention.
-Oftentimes people can get the tokens after ICO at a better price.
-Token prices are currently depressed – only 30 tokens are above $70 million market cap. If a $35 million ICO doubles, it is already one of the top 30 most valuable tokens.
Therefore, we are becoming more selective when it comes to our rating – that’s why you are seeing more neutral or negative ratings from us. We understand that this is boring, but we need to be patient until the market turns around. It is better to be safe than sorry.
However, over time, quality ICOs can still deliver great performance. We believe a new equilibrium will also be formed – deteriorating ICO performance will lead to less people participating, which leads to less projects receiving funding, which leads to more projects lowering hard cap in order to attract funding, which leads to a higher return for ICO participants.
Going forward, we expect that projects will lower their hard caps on average. Perhaps only spectacular projects will be able to raise $30+ million in the future.
At the same time, some existing tokens are trading at an attractive valuation. There are many tokens trading at a sub-30 million valuation and the upside for some of those projects can be substantial.
Remember, crypto asset prices are very unpredictable. When the market is gloomy, it often provides an attractive entry point for above-average return.
Developments in the Cryptocurrency World
Russia Issuing ‘CryptoRuble’: https://cointelegraph.com/news/breaking-russia-issuing-cryptoruble
The People's Bank of China inches closer to digital currency: http://www.chinadaily.com.cn/business/2017-10/14/content_33235955.htm
Ethereum’s Byzantium Hard Fork Upgrade Successful: https://www.coindesk.com/ethereums-byzantium-hard-fork-is-running-smoothly-developers-say/
48 Firm Including HP Enterprise and Sberbank (Russia’s largest bank) Joins Enterprise Ethereum Alliance: https://entethalliance.org/hewlett-packard-enterprise-47-organizations-join-200-member-strong-enterprise-ethereum-alliance/
Reuter Special Report: Backroom battle imperils $230 million cryptocurrency venture: https://uk.reuters.com/article/us-bitcoin-funding-tezos-specialreport/special-report-backroom-battle-imperils-230-million-cryptocurrency-venture-idUKKBN1CN35K
LedgerX Bitcoin Derivatives Trades Past $1 Million Following Soft Launch: https://cointelegraph.com/news/ledgerx-bitcoin-derivatives-trades-explode-past-1-mln-following-soft-launch
Articles From Crush Crypto
Analysis of Mercury Protocol ICO: https://crushcrypto.com/analysis-of-mercury-protocol/
Analysis of Spectre ICO: https://crushcrypto.com/analysis-of-spectre/