Almost Half of Ongoing Initial Coin Offerings Have No Minimum Viable Product, Even with Bear Market
The current bear market has been going on for over a year, much to the dismay of investors, exchanges, and other major players in the crypto industry. With no bull run in sight, the bear market seems to have most substantially impacted ICOs, and their situation isn’t improving. In fact, with the bear trend and the reserved approach from retail investors, just under half of all ICOs have a Minimum Viable Product (MVP), based on the statistics by Icobench.
An MVP is a product that basically gives early investors and customers an idea of what is to come, and what the company is capable of. Most of the time, before outside funding is even sought, an MVP is made available to show off from the crypto project. However, it is surprising that ICO projects have abstained lately from even having a product to show as fundraising in the market gets harder. However, there is no shock that the completed ICOs have been slowing down since more companies are not showing off their validity.
Last month, Icobench reported 78 completed ICOs, which is down by half of what was completed in January. However, only a third of the ICOs in February managed to actually raise funds, though there were a few that rescheduled for later in 2019. At this point, there are still 439 ICOs still going on, and the fact that 48% have no MVPs means that investors have no reason to trust that they will follow through.
Realistically, cryptocurrency projects that are just built on the blockchain, or that have no blockchain necessary, would be able to show an MVP prior to beginning an ICO. Projects that are creating a blockchain from scratch may struggle to do this, but there are plenty of ways for a team to prove their worth. Still, the lack of proof from other companies just proves that STOs may be taking over instead.
STOs, or Security Token Offerings, have been reported to be much safer and more lucrative for investors. Google Trends reveals that the searches for the term “STO” have started increasing, especially around September. Though searches for this item have decreased since the beginning of January, there have been very few projects that have actually taken on this option, considering the uncertainty in crypto regulations.
Still, it is worth noting that STOS provide financial securities for investors that have already gotten accreditation, and there are several platforms that have already made a welcoming space for them. Considering that the token is considered secure already by the current laws, there is just worry about having an MVP.
It does not look like holding an MVP is truly the only factor in giving consumers a validated feeling about their investment. With or without an MVP, there are less than half of the top 100 cryptocurrencies on the market that have their working products in use.