TechCrunch Concludes 2019 Is Not In Favor Of Security Token Offerings, Though Some STO Hope Exists
As the crypto market continues to dip, investors are trying to understand what to make of it in the time to come. TechCrunch has since explored the notion of supporting “security token offerings” and how the promotions surrounding it have failed to make it attractive to investors.
A recent piece dubbed, “5 Advantages of Security Tokens,” by Stefan Perlebach pointed out that security token offerings are preferred. The arguments made in supporting the aforementioned statement include: SEC is more likely to be attractive to them (eventually), and that STOs are more accepting of new investors, are associated with higher liquidity, deemed efficient and scalable, and are as transparent as it could get.
TechCrunch notes that such promotion has been going on for some time now, and further added that their findings suggest people are less inclined to purchase STOs and that they carry very little use cases.
The yearning for tokenization started with ICOs’ breakthrough towards the end of 2017, which at the time were supposedly deemed “an innovation on par with joint stock corporation.” But this did not last as long as one would have wished, as the SEC set out rules and regulations and the potential characteristics of said tokens that could lead it to serve as a security.
STOs only gained attention in 2018. TechCrunch argues that a benefit with this respective type of token is that they could work in the same way cryptos have but for contracts. That is, they have the ability to prove that “ownership [of contracts] could be digitally secured and transferred without intermediaries.” The case made here is that using said methodology implies reduced costs, reduced liquidity payments and increased number of buyers and opportunities.
The mentioned facets induced confidence in Wall Street and investors that STOs could potentially initiate a bull-run. Other supporters include the media, who created hype revolving around STOs, indicating that every player from investors and brokers to issuers had some benefit waiting for them.
But, again, such praise has not been reflected in the market as of yet. Does this mean that STOs will fade away in the time to come? It is too soon to tell, as the overall market seems to continue its trend of plummets. However, it is evident that many still remain hopeful. What are your thoughts on STOs being potentially superior? Are you convinced by such statements?