ICOs Have Generated $13.7 Billion in Funding This Year: PwC

The red-hot market for initial coin offerings (ICOs) is even hotter than many had believed – that is, if you take PricewaterhouseCooper’s new study at face value.

ICO Market Surges

In a new report, PwC uncovered $13.7 billion in ICO activity in 2018, a figure that runs more than double the commonly cited crowdfunding tally. By comparison, ICOData.io has the total ICO funding amount at nearly $5.9 billion for 2018. Meanwhile, The Wall Street Journal recently cited a figure of $11.8 billion.

Researchers from PwC and Crypto Valley noted “… continued growth and popularity of ICOs globally in 2018, with over 537 ICOs conducted in the first five months of this year, raising a combined total of $13.7 billion USD – more than all ICOs which took place before 2018 combined.”

The vast majority of the funds came from investors who have large positions in bitcoin and Ethereum, the launching pad for the vast majority of token projects. This suggests ICO investors are generally crypto-savvy and not the gullible beginners that many in media claim.

“Going forward this quarterly report on global ICO activity will continue to track the changes and developments in the industry as it undergoes continuous expansion and substantive change,” the researchers said.

What Slowdown?

PwC’s report suggests that, contrary to popular belief, demand for ICOs has not slowed in recent months. Rather, the crowdfunding model continues to demonstrate a seemingly endless cycle of fund circulation, with holders of bitcoin and Ethereum using their existing assets to fund new projects on an ever-increasing basis. Hacked and others had previously reported a sharp slowdown in crowdfunding amounts amid regulatory uncertainty and heightened investor awareness.

The report also suggests that demand for ICOs has withstood a crippling 70% correction in cryptocurrency prices since January, culminating in the recent year-to-date low.

Daniel Diemers, PwC’s head of Blockchain EMEA, also noted a significant improvement in the ICO market from the perspective of best practice and investor relations. In his view, ICOs will play an important role in the future of business fundraising.

“Hybrid models of combined Venture Capital and ICO financing are increasingly bringing together the best of what both have to offer, so that the soundness of a business is validated while it realises its market potential by receiving crowd support.”

For all its growth, the ICO market has seen plenty of busts since the boom began over a year ago. According to Tech Crunch, more than 1,000 cryptocurrency projects have already failed this year.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi