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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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4.7 stars on average, based on 773 rated postsChief 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




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Market Overview

Dow Crosses 26,000 as Trade Optimism Lifts Stocks

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U.S. stocks advanced Friday, as the major benchmarks rebounded from their worst slide in two weeks on renewed optimism over China trade talks. Bitcoin and other cryptocurrencies rebounded from a midweek slump, strengthening the case for a larger short-term rally.

Dow Returns to Strength

The Dow Jones Industrial Average smashed through 26,000 on Friday and settled close to its intraday high. The blue-chip index closed up 181.18 points, or 0.7%, at 26,031.81. Twenty-three of 30 index members finished higher, led by Pfizer Inc. (PFE) and Intel Corp (INTC).

With the gain, the Dow extended its weekly winning streak to nine weeks, the longest since 1995.

The large-cap S&P 500 Index gained 0.6% to settle at 2,792.67. Nine of 11 primary sectors contributed to the rally, with shares of information technology companies leading the charge. The sector rose 1%. Health care and communication services also outperformed the broad average.

A strong performance for tech stocks sent the Nasdaq Composite Index sharply higher. The tech-laden average rose 0.9% to 7,527.54.

Trade Optimism Lifts Markets

Stocks returned to strength Friday on reports that officials from the U.S. and China held marathon talks aimed at resolving their trade dispute. Trade representatives met in Washington for nine hours on Thursday, where they discussed a range of issues including state subsidies and illicit technology transfers.

President Donald Trump was also said to be meeting China’s top trade negotiator, Vice Premier Liu He, on Friday. No further updates have been provided.

While a trade deal between the two countries remains highly unlikely, Trump has expressed willingness to extend the negotiating window beyond the March 1 deadline. He told reporters Friday that the deadline isn’t a “magical date” but a good barometer to measure progress from both sides.

Bitcoin Up 10%

Bitcoin’s price climbed back above $4,000 Friday, as momentum swung in favor of the bulls following a minor midweek slump. The leading digital currency by market cap reached a session high of $4,074 on Bitfinex and was last spotted in $4,050 range.

Via CoinMarketCap, bitcoin’s aggregate value was a hair below $4,000 at press time, enough for a gain of 1.3%. Over the past seven days, BTC gained 10.3%.

The top-20 coins traded higher on Friday and booked solid gains for the week. EOS was the top performer, gaining 3.87% for the week. Ethereum gained 22% and bitcoin cash was 18.5% higher.

Read our Week in Review: Crypto Spring? Bitcoin on Track to Snap Six-Month Losing Streak Following Spectacular Week.

The overall cryptocurrency market capitalization improved to $135.3 billion, having gained $15 billion over the past seven days. Trade volumes are down sharply from their early-week highs but are still well above the yearly average.

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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4.7 stars on average, based on 773 rated postsChief 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




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Market Overview

MindChain Conference: ‘Blockchain Isn’t Our Saviour’; Romania’s Growth Says Different

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Blockchain was picked apart at the MindChain conference this week, where one prominent commentator said blockchain won’t make the world a better place, and that it won’t be our saviour.

Blockchain Won’t Make the World a Better Place

One of Forbes’ ‘30 Influential Europeans Under 30’, Cornel Amariei took aim at blockchain, which he said was a buzzword, and that there weren’t too many places it could be applied:

“I hate buzzwords because they give a false impression about what is happening. Blockchain is a buzzword – I’m not a big fan, and I’m not against it either – but it’s nothing more than an encryption and decentralization technology – there aren’t that many areas where it can really be applied well.”

The 22 year old inventor and author suggested blockchain’s reach will be more limited than most in the crypto space would like to believe. He said:

Blockchain will solve a lot of issues, but it won’t really make the world a better place. It’s not our saviour.

Romania: Blockchain and Crypto Tech Hub

Held by Business Review, the conference comes from Romania – the latest addition to the European Union having joined in 2007. Romania’s economy has grown at twice or even three times the rate of its larger EU neighbours in recent years. Its approach to tech innovation is a big reason why.

Sixteen blockchain and cryptocurrency startups have launched in Romania in the past year, while Google, Facebook, Amazon and Microsoft all have offices scattered around its major cities.

Those startups include a blockchain-based energy supplier, an augmented reality (AR) project, and many more, including the recently covered Ark (ARK).

Romania’s new role as a tech hotspot can largely be attributed to its encouraging tax policies – the country’s corporations are taxed at 16%, hence the arrival of Google, Amazon, et al. Meanwhile, low income earners only have 10% of their earnings taxed.

If that sounds good get this: if you work in the IT industry your income doesn’t get taxed at all. Same goes for R&D workers and those involved in technological development. (Side note: construction workers are also exempt from income tax).

Breakdown of Romania’s tax exemption policies – designed to encourage growth and worker participation.

New Transylvanian Silicon Valley

It’s thanks to policies like these that Romania recorded 5.7% growth year-on-year leading into 2017 – the fastest rate of growth in the European Union. Romania’s tech growth has been such that it has drawn comparisons with Berlin; while Techcrunch once referred to the nation as the ‘Silicon Valley of Transylvania’.

Blockchain is currently benefiting from this new wave of Romanian innovation and optimism. Sixteen crypto startups from a population of just 19 million – all within the past year or so – must be one of the strongest ratios in existence right now.

It’s true that blockchain didn’t have much of a hand in Romania’s glowing recent past, but it may yet have a big role to play in its future.

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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4.5 stars on average, based on 147 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Market Overview

How to Escape Inflation

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Hi Everyone,

After years of economic crisis and hyperinflation, it seems that Zimbabwe may finally be taking their first steps toward stabilization.

For more than a decade the African nation has been relying on a multi-currency system that relies heavily on the US Dollar. However, in a country of 16 million people, there aren’t always enough dollar bills to go around. Talk about a liquidity issue.

So most Zimbabweans receive their monthly paycheck by electronic transfer to their bank account, which they then need to figure out how to spend in the grocery store.

In 2016 the government issued a new currency called a bond note, the exchange rate of which has been controlled by the government. In a recent update, the Reserve Bank of Zimbabwe has ditched capital controls and is now allowing bond notes to trade according to the free market.

In a country that has full mobile penetration, it’s really a wonder to me how cryptocurrencies are not playing a larger role.

Hint hint, wink wink, to Dash, Bitcoin Cash, and Litecoin.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 7 days | Days to Brexit: 35
  • Crypto Changing Landscape
  • Ethereum’s Rate of Inflation

Please note: All data, figures & graphs are valid as of February 22nd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks pulled back a bit yesterday but this morning investors are looking to reverse the losses. We’ve been counting down on geopolitical timers for so long that many market participants are already dreaming of a day when those counters get to zero and all is resolved.

The tricky one remains Brexit. At this point, analysts have identified three possible yet unlikely outcomes.

1. No deal Brexit
2. Theresa May’s deal, or some variation
3. A time extension

Each of the above seems to be extremely unlikely yet we know that one of them has to happen. Should option one materialize, it’s very likely that the British Pound will fall, and in the event of option two, the Pound should rise.

The Pound has been falling pretty steadily since May. Here we can see the GBPJPY kissing her 200-day moving average (blue line).

Also, the New York session today should be really interesting as we’ll hear from a slew of central bankers including Mario Draghi and no less than four Fed members as well as receiving a monetary policy report from the Fed.

Remember, these are the guys who drive the markets. So it pays to pay attention.

SEC Watchers

Just as traders in traditional markets watch the Fed, cryptotraders seem to be forming a habit of watching the SEC.

Today, we got some pretty astonishing news that an ICO called Gladius Network LLC received a pass from the SEC despite them selling $12.7 million worth of unregistered securities tokens. This is quite a different outcome than the SEC took with Paragon and Airfox just three months ago, who each needed to pay a fine of a quarter million dollars.

While the SEC is the most important regulatory body in the United States when it comes to securities, other regulators may be influencing policy as well. Our US Managing Director Guy Hirsch wrote me this morning…

How about the Crypto Rally?

Well, excitement is still high but seems to be fading. Volumes did peak out at $35 billion during the full moon on Tuesday, February 19th. Today we’re down to $23 billion traded across global crypto exchanges.

Some have pointed to the volumes on Wall Street’s bitcoin futures, provided by the CME group, which reached a new record high of 18,338 contracts during Tuesday’s madness. That comes out to a total volume of approximately $357 million, or approximately 1% of the amount traded on exchanges.

Also, the major price surge actually happened on Monday, when the CME was closed for President’s day. So, it’s clear that Wall Street is the passenger here and not driving.

So, to find out whether this rally is about to continue or claw back we need to look at the root. As we’ve been discussing, this entire rally seems to have been caused by a shortage in the supply of new Ethereum.

Historically, the Ethereum network produces about 20,000 to 30,000 new ETH per day. However, since the beginning of the year the amounts have been tapering off and as of last week, the new supply was more like 13,000 per day.

The Constantinople upgrade which is currently scheduled for block height 7,280,000 (approximately February 27th), is supposed to stabilize supply to about 5,700 blocks per day and reduce the block reward from 3 ETH to 2 ETH per block. So, by these metrics, we can deduce that new production after the fork will be about 11,400. Far less than the current rate mentioned above.

Now, another part of Constantinople is that it’s supposed to reduce the amount of gas needed per transaction. However, it’s not apparent how the new gas fee structure will affect demand.

So even though we know supply will be reduced drastically, we don’t know if this will affect bottom line inflation because we don’t know exactly what demand will look like under the new system.

Clearly, forward guidance on monetary policy is not the largest concern for Ethereum’s community leaders.

As far as the rest of the crypto market, this recent rally certainly has the big fish nibbling. We’ve been in the accumulation zone for a while now and this latest push off the floor might just be enough to bring the market out of a slump, but there are several technical levels that need to be broken before that happens.

Wishing you an awesome weekend!

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

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 152 rated postsSenior Market Analyst at Etoro.com.




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