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Annual ICO Funding Reaches $3.25 Billion in October

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The amount of money raised by start-ups via initial coin offerings (ICOs) rose again in October, as more businesses embraced the controversial crowdfunding model.

ICO Funding Surpasses $3 Billion

Around $380 million flowed into ICOs in October, according to CoinSchedule. That’s well below the $800 million-plus the crowdfunding model generated in September. That brings the total capital raised for the year to $3.25 billion.

Readers may recall that ICOs surpassed early stage venture capital  following a massive surge in the months of May, June and July. At the start of the year, there was barely any activity in the space.


Source: CoinSchedule

So far this year, a total of 203 crowdraises have been issued. The previous year saw just 46 with a total raise of $93.4 million.

A Closer Look at the Numbers

More than one-third (37%) of the  funds raised this year went toward infrastructure projects. That amounts to a little more than $1.2 billion. Trading and investment platforms generated nearly $420 million, or 12.9% of the total capital raised.

Finance projects were the third most popular at $307 million, or 9.4%. Data storage (8.8%), payments (6.6%) and healthcare (6.2%) were also on investors’ radar.

Practically every industry has been represented in token raises this year, including governance, supply and logistics, machine learning and even commodities.

Infrastructure was by far the biggest category for 2016. accounting for more than 45% of the total capital raised. That was followed by trading and investing (12.3%), content management (9.5%) and events and entertainment (7.8%).

Filecoin continues to be the biggest capital raise ever at $257 million. Tezos is a close second at more than $232 million. The top-ten list of token raises is provided below.

Rank Project Funds Raised
1. Filecoin $257 million
2. Tezos $232.32 million
3. EOS Stage 1 $185 million
4. Paragon $183.16 million
5. Bancor $153 million
6. Kin $97.04 million
7. Status $90 million
8. TenX $64 million
9. MobileGO $53.07 million
10. KyberNetwork $48 million

Source: CoinSchedule

Regulatory Uncertainty

Some analysts say that a lack of regulatory clarity around token raises may limit their appeal in the future. Regulatory woes may have limited the amount of money raised in August after the Securities and Exchange Commission (SEC) ruled that The DAO tokens were securities and therefore subject to federal laws.

ICOs are often referred to as crowdfunding campaigns but differ in important ways from the products offered on platforms like Kickstarter. Solid ICOs issue new cryptocurrency that can then be used by the network to participate in its essential functions. On the other hand, some of the more unsavory token sales are nothing more than a way to make quick money.

That being said, it is highly unlikely we’ve seen the biggest capital raise just yet. Blockchain powerhouse tZERO is expected to generate between $200 million and $500 million in its upcoming launch. The distributed ledger platform will host its pre-sale via Simple Agreement for Future Tokens (SAFT) between Nov. 15 and Dec. 31. The pre-sale will be administered by New York-based SAFTLaunch.com.

SAFTs are a way for token sales to vet accredited investors. Its proponents say the protocol will help create a self-regulated cryptocurrency market in the absence of a clear government standard.

ICOs have come under attack in several jurisdictions, most notably China and South Korea. The two Asian countries have issued full bans on coin raises on account of financial risks. Several other jurisdictions are also considering similar measures to control the growth and widespread adoption of a funding method they know little about.

Russia has also embarked on regulating the cryptocurrency space. Instead of pursuing an all-out ban, the Kremlin is looking to centralize crypto mining and allow citizens to exchange digital assets for Russian rubles.

Recently, Russia’s First Deputy Prime Minister Igor Shuvalov said the new rules won’t kill the ICO market. President Vladimir Putin has also stated that ICOs represent “tremendous potential” and should not be held back from further development.

Cryptocurrency Market: State of Play

At the time of writing, there are roughly 1,200 cryptocurrencies in circulation. Their combined value is around $169 billion, according to CoinMarketCap. Bitcoin’s meteoric rise earlier this month sent a clear signal that the bulls are still in control, and are keen on buying the dips.

Regulation has had an important influence on the cryptocurrency market, but concerns of prohibition have been largely overplayed. It didn’t take long for bitcoin to rise from the ashes following China’s regulatory attack on cryptocurrency in September. What’s more, several countries appear to be taking a more measured approach to digital assets than their knee-jerk reaction would have entailed.

Even Russia’s decision to regulate cryptocurrency followed an initial overreaction that made many people nervous. Now, there are talks of a ‘CryptoRuble’ and regulating initial coin offerings. In fact, Russia’s largest bank recently joined the Enterprise Ethereum Alliance (EEA), an esteemed venue for enterprises, startups and technology vendors to explore the commercial potential of the ether blockchain. Its members include financial heavyweights Credit Suisse, J.P. Morgan and UBS. Technology giants Microsoft, Samsung and Intel are also part of the group.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Market Overview

Breakout Imminent

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Hi Everyone,

Huge congratulations to Canada for becoming the second country in the world to fully legalize marijuana!

This is a huge milestone for this fascinating industry and in my personal opinion is long overdue. I hope that in the next few years many more countries will open their respective markets to this exciting field.

Unfortunately, the @CannabisCare copy portfolio on eToro is closed for investing now but there are other options to invest for those of you who are interested.

For example, you can click this link to see the marijuana stocks that are available on the eToro platform. Or, you can check out the HMMJ ETF, which tracks the North American Marijuana market.

Of course, the usual disclaimers apply and always diversify!!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Breakout Stocks
  • Breakout Bonds
  • Breakout Bitcoin

Please note: All data, figures & graphs are valid as of October 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Volatility begets volatility. At least that’s the word on financial media lately. It’s been an entire week since the broad stock market sell-off and though we’ve seen a bright bounce from the bottom, things are far from normal.

The US indices have been the quickest to “recover” and as we can see, they’ve recouped almost half the losses from the top.

This is likely due to the monetary policy in the United States which is currently sucking up the wealth of the world. Higher interest rates are a big incentive for foreign investors to store their wealth in American assets.

As we can see, other markets aren’t nearly as far off the lows…

Bond Watch

As you’ll recall, the start of volatility this year came in February and it was largely attributed to rising bond yields. So we do need to keep a close eye on these.

In the USA, the 10-year yield is once again on the rise and threatening to break new highs. Yesterday, we saw another solid leg up…

The level to watch out for now is 3.25…

In Italy, where we are awaiting some potentially sour news from Brussels, the 10-year yield is also sitting at the highs and could very easily breakout from here.

When Bitcoin Breakout?

It’s only a matter of time now. Of course, the flatline pattern could easily remain for another few months and that wouldn’t be a bad thing, however, there are signs of excitement boiling underneath the cool price action exterior.

First off, the transaction rate has been rising steadily. Here we can see Bitcoin’s average transactions per second (TPS) rate, which has been growing steadily during the stable market conditions. This is a classic indication that we’re nearing the end of the flat cycle.

Along with the TPS rates, volumes across exchanges has reportedly remained at a steady rate of around $10 billion daily for several months now. A figure that is exponentially higher than it was just 18 months ago.

Last and foremost, and this is what I wanted to highlight today, volumes on Wall Street are growing at a rapid pace.

The CME Group has reported yesterday that the volumes on their Bitcoin futures contracted have ticked up by a massive 41% in the third quarter of 2018.

This massive surge in interest doesn’t even include the last 18 days where we’ve seen the historic update that Fidelity Investments is joining the market.

Let’s have an awesome day!!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 133 rated postsSenior Market Analyst at Etoro.com.




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Analysis

Hawkish Fed Lifts Yields, Dollar as Stock-Correction Continues

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US stock markets had a choppy and mixed session, and the major indices closed the day virtually unchanged, despite the early losses and the negative news flow. The US housing market disappointed again, the EU-Italy debate over the country’s budget continued, the US-Chinese relations further deteriorated, and the Fed also provided a negative catalyst towards the end of the day.

Dow 30 Index Futures, 4-Hour Chart Analysis

Investors were eagerly waiting for the meeting minute form the Fed’s latest meeting, but those expecting a dovish surprise were let down. The transcript contained more hints to tighter-than-expected monetary policies in the coming months and years, but still after an initial dip stocks rebounded to pre-announcement levels.

US 2-Year Treasury Yield, 4-Hour Chart Analysis

While especially shorter-dated yields rallied after the release, we would add that although there were voices that the Fed should exceed the “neutral” interest rate to cool the economy in the future, those voices will likely be muted by any major correction in financial markets or even a moderate slowdown in the economy.

Russell 2000, 4-Hour Chart Analysis

Stocks weathered the rise in yields so far, but after-hours, futures markets are drifting lower, and should yields resume their recent swift advance, another wave of selling could hit risk assets. With a lot of stocks and benchmarks still clearly in oversold territory concerning the short-term momentum indicators, the choppy correction could also continue, but we remain defensive towards global stocks, and we expect the risk-off period to continue in the coming weeks.

Dollar Extends Early Gains as WTI Crude Dips Below $70

Dollar Index (DXY), 4-Hour Chart Analysis

While the Dollar was already up in early trading against most of its major peers, it got a strong boost from the meeting minutes, with the Dollar Index climbing above the key support/resistance level near 95.50, establishing a swing low.

Barring a quick reversal, the Greenback headed for another important leg higher, and all eyes will be on the 1.15 level in the EUR/USD pair, as an extended move below that could open up the way for a strong momentum move in the USD. On a positive note, the most vulnerable emerging market currencies continue to perform well, in contrast with equities in the segment, and that could give some stability to risk-on currencies in the face of the broadly negative technicals

WTI Crude Oil, 4-Hour Chart Analysis

Commodities mostly finished the day with losses amid the rally in the Dollar, but while gold still only gave back a small part of its recent gains, oil plunged to a new almost one-month low, at least as measured by the WTI contract.

The Brent contract continues to outperform despite the easing of the US-Saudi tensions, but overall the risk-off shift in global markets is clearly hurting oil.  Copper is still stuck in a volatility compression pattern, but given the lengthy consolidation, a significant move is expected in the coming days by the industrial metal.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 378 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Market Overview

Market Update: U.S. Stocks Sputter as Fed Minutes Signal Assertive Rate-Hike Path

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U.S. stocks traded lower on Wednesday, with financials diverging from the broader market in anticipation of an assertive rate-hike path by the Federal Reserve. Crypto markets were largely unfazed midweek, though Stellar XLM emerged as the most prominent winner with gains of more than 7%.

Stocks Settle Down

Equity markets drifted between gains and losses before settling mostly lower. The Dow Jones Industrial Average closed down 91.74 points, or 0.4%, at 25,706.68. The technology-heavy Nasdaq Composite Index closed at 7,642.70, where it was virtually unchanged. Meanwhile, the large-cap S&P 500 Index pared gains by the close to settle flat at 2,809.21.

Most major sectors finished in the red, with energy, materials and discretionary shares leading the market lower. Technology stocks also declined sharply. On the opposite side of the spectrum, financials stocks rose more than 0.9% on average.

FOMC Minutes Confirm Need for Higher Interest Rates

Several members of the Federal Reserve’s policy-setting board believe interest rates need to rise higher than the long-term average, according to the official transcript of last month’s meeting, which was released on Wednesday. All members agreed to remove reference to accommodative monetary policy from the official statement.

Central bankers last month voted unanimously to raise the federal funds rate to 2.25%, with the official policy statement making a strong case for an additional hike in December. Rate-hike expectations have been baked into the market, with long-term bond yields soaring to seven-and-a-half year highs.

“Participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labor market conditions, and inflation near 2%over the medium term,” the official transcript read.

The U.S. dollar continued higher after the release of the FOMC minutes at 2:00 p.m. ET. The dollar index (DXY), which tracks the performance of the greenback against a basket of six currencies, jumped 0.5% to 95.48.

Crypto Markets Stabilize

With the exception of Stellar XLM, major cryptocurrencies were largely unchanged Wednesday as a lack of trading catalysts kept speculators on the sidelines. The combined valued of digital assets reached a high of $212.7 billion, according to CoinMarketCap. The total market has since fallen back to around $211 billion.

XLM rose to fresh weekly highs on reports that PrimeTrust, a qualified custodian, was rolling out support for Stellar-backed tokens. The XLM token is currently valued at $0.2412.

Bitcoin, the largest digital currency by market cap, consolidated in the mid-$6,500 range following a sharp run-up in prices at the start of the week. BTC continues to trade at a premium on Bitfinex and other exchanges known for facilitating large USDT orders. USDT, the controversial stablecoin issued by Tether, sold off on Monday, underscoring a broad shift in investor sentiment.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 647 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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