Forrester Research Crypto Expert Claims Many ICO Token Projects Are Running Short Of Money
Crypto Expert Claims Many ICOs Are Running Short Of Money
In the midst of all the havoc being faced by the crypto market at large, it has now come to light that many of the ICO projects that were able to procure millions of dollars on average from investors are now running out of money. Not only that, most of these projects also either have no “working product” to show for or have not met many of their envisioned milestones.
In this regard, a spokesperson for Forrester Research, Martha Bennett, was quoted as saying that over the course of 2018, many ICOs “have struggled to establish a practical business model” that can take into account the bearish conditions that have persisted throughout the year.
More On The Matter
According to statistical data available on the internet, over the course of 2017, ICO projects were able to procure a total of $4 billion from the public domain. However, if information provided by DappRadar is to be believed, apart from IDEX and ForkDelta, most of the other dApps in the market do not possess more than 600 users.
Not only that, many of the other top 100 cryptos with active dev teams and online communities (such as Augur, 0x, Decentraland, ICON, Wanchain, and Polymath) too have been finding it hard to maintain active user bases (as well as a high level of user activity).
On the subject of dropping investor interest, Ms. Bennett noted that 2018’s bearish market conditions have been a “wake up call” for investors that have previously funded multi-million dollar projects (without any working products or long term strategies to back them up).
Bennett then went on to say:
“Sooner or later, this would have led to a contraction anyway. The crypto crash acted as both catalyst and wake-up call.”
Lastly, it is also worth noting that since November, many established organizations such as Coinbase and ConsenSys have had to lay of some of their core employees (due to the ever dropping prices of various premier altcoins). To be even more specific, over the course of the past 60 days, Coinbase has fired around 28 people from its current roster.
Looking forward, it is tough to say how crypto oriented businesses will continue to evolve in the coming future (especially since the market at large seems to be facing some real issues at the moment). However, according to Lex Sokolin, the global director of fintech strategy at Autonomous Research, as and when new investors start to enter the crypto arena, the current negative effects of the ongoing bear run can be “counterbalanced” quite effectively.
“I’d be comfortable saying that the pricing pressure on digital assets in 2018 is likely to lead to 25-50-percent shutdowns and layoffs for current projects based on historical comparisons. However, the pace of new entrants and capital could counterbalance this contraction and still grow the sector overall.”