Bitmain CEO Jihan Wu: ICO Token Model is Unsustainable, Bubble Popping Soon
Jihan Wu, Bitmain CEO says the ICO Bubble likely to pop soon
Jihan Wu, one of the most influential figures in the crypto industry recently said that he is skeptical on the ICO model future. Wu who is currently the CEO, Bitcoin mining conglomerate Bitmain, made his view public when he was interviewed by CoinGeek.
Mr. Wu’s position comes as big news for the crypto analysts considering Bitcoin dominates half of the total crypto market. According to Wu the ICO bubble is an inevitable concept that will occur with time given the market forces within crypto projects and coin exchanges. His exact sentiments were,
“I believe ICOs are kind of an unsustainable financial bubble. It will burst eventually. It’s just a matter of time. I believe it’s just one year or two. Either way, it will just disappear.”
Wu supported his view on the Initial Coin Offering model with the idea of regulated securities. Ideally, investors purchase stocks to sell them off for profits at a future date and can receive dividends within this period. This is not far from what most crypto investors have in mind when fund raising crowdsales, a concept that may not be sustainable long enough. ICO projects launch and raise funds on highly speculative information; investors do not receive dividends or have rights to vote. Instead, the crypto HODLers only expect to sell their coins off at a later date for profit.
Other crypto players that have been bearish on Initial Coin Offering include Binance, a leading crypto exchange as of press date. Binance head of its venture wing has indicated that the company shares Mr. Wu’s sentiments; a bubble is cooking for ICO’s!
Bitmain’s role within the cryptocurrency and blockchain sector cannot be undermined. The company has committed $1.1 billion profits from Q1 to investing in projects within the crypto space. During the beginning of 2018, Bitmain played an important role in raising funds worth $400 million for Circle Internet, a US based crypto company.
Other areas of venture include the Opera Software AS where Bitmain acquired stake through a $50 million payment. AS platform has now integrated crypto wallets for PC and Android within its infrastructure.