2017 was a year of hype in which cryptocurrency projects such as Initial Coin Offerings (ICOs) and others expanded in the market and all over the world. There were many new projects launched every single day. The market was full of them.
However, 2018 brought reality to the space. Projects that were not ready to operate and that did not deliver the promises made when they were selling tokens, disappeared or are simply zombie tokens.
Finance Magnates was present at the Next Block conference in which future trends of the virtual currency market were discussed. One of the main issues that might chance is related to scammers and fraudsters.
The market seems to be maturing and companies that are in for the long-term will be shaping the new space in 2019.
The founder and CEO of Celsius, Alexander Mashinsky, commented about these investors that left the market during this year:
“We’re seeing more sellers than buyers and that’s a good [development]. We don’t want those people. They were not here for the long run, they just wanted to make some instant cash.”
With the bear market that we have experienced in 2018, new projects will be more cautious at the time of starting a business in the space. At the same time, regulatory agencies are starting to take harder measures against ICOs that are not registered as securities. At least in the United States, the Securities and Exchange Commission is trying to enforce securities laws in the country.
Eran Tirer, a former IBM executive, explained that the market has companies that were searching financing with just using the word ‘blockchain.’ However, these projects did not have anything revolutionary or experience in the market to start offering new solutions to some issues. According to Mr. Tirer, that does not make any sense for the long run.
Indeed, some of the white papers were copied, there was no clear roadmap related to how they were going to be working on the projects, etc.
Aviv Lichtigsten, the founder of the blockchain education company 101 Blockchains, said that companies have to start building technology before publishing white papers.
“There need to be more working products and fewer papers.”
Isaac Thomas, the CEO of Vegan Nation, explained that their company is working in a product and a virtual currency rather than thinking of an ICO. Indeed, he mentioned that they could have launched an ICO and raise $100 million but they didn’t do it.
“But if the coin lost 90 percent of its value then, in the long run, we would lose the trust of our community. So, instead of that, we built all the infrastructure and products – things most companies are talking about doing two or three years after the ICO.”
The event shows that people and investors are tired of listening to promises of massive returns or magic solutions to daily issues. However, the market will need to become more mature and start offering products that have real applications. ICOs would have to demonstrate that they already have a project and platform rather than waiting two or three years for a platform to be built.
It is time to start thinking about a mature space, with more compliant companies and with projects that are realistic about their potentialities.