Brian Kelly Critical Of ICO Token Model: ‘Whitepaper And A Dream’ Days Are Numbered
CNBC contributor and the founder and CEO of BKCM LLC, Brian Kelly, has said in a recent interview that he believes the days of ICOs coming out of nowhere to million-dollar valuations is over.
He thinks the market has already shifted towards a more mature view of the innovative funding cycle of cryptocurrency, with ICOs largely being held to a higher standard than they were even at the start of the year.
Kelly states that he sees blockchain and cryptocurrencies as “early-stage technology,” saying as a model that Amazon founder Jeff Bezos seemingly could not imagine his online bookstore turning into a major video streaming platform.
“We have a new technology that disintermediates a lot of industries. That’s important, and that’s going to be something that’s here for the rest of my career at least and likely a lot longer than that.”
In part, the new approach has been forced upon the market and investors due to the ongoing bear cycle conditions. Rather than being flush with capital from Bitcoin and altcoin bull-runs to end 2017, most crypto investors are having to take a spare approach to their investment, in addition to legitimate fears over where the price of crypto will be at the start of an ICO buy-in versus when the coins are actually released on the market.
On the topic of fundraising through ICOs, Kelly suggests that, “it will stay, but with a little change.” He said that ICOs proved to be an effective tool for funding projects using cryptocurrencies and blockchain technology. However, he added that “the days of a whitepaper and a dream and $30 million are probably over.”
Noticeably, despite frequent news stories of ICOs making off with investor funds or failing to fulfill whitepaper promises the overall health of the market has been strong throughout the year. Since the midway point of 2018, ICO volume has already doubled that of the previous year, with developers in nearly every industry flocking to cryptocurrency to cash in on what they view as easy profit.
At the very least, the ICO model does provide a fast and efficient way to raise funds for projects, as opposed to the more gated approach of raising through angel investors and VCs.