The ICO industry has been developing with a crazy speed in 2017, with thousands of new ICO projects flowing into the market. However, with the rising concerns from the global regulators, market might undergo major changes in the current year. Here, we briefly discuss 2018 ICO Market Predictions.
CryptoToday – Cryptocurrencies have been around for quite some time already. Yet, these digital assets have gained their popularity only during last year. The cryptocurrency market experienced a major transition from being a market for the money of the future to being one of the most popular places to get great returns.
What is ICO?
Initial coin offerings (ICOs) are one of these investments that also have joined cryptocurrencies in their popularity rally in 2017.
An ICO is a crowdfunding method that utilizes cryptocurrency instead of cash. Entities offer tokens in exchange for a particular cryptocurrency. The token is then can be used to buy from the company in the future or sold to others. Presently, there are hundreds of active ICOs and numerous that are scheduled to launch.
ICOs provide many benefits to both the investors and the companies. One of the biggest advantages for the companies is that ICOs are relatively easier and faster to set up in comparison to any other fundraising option. We discuss ICOs anatomy in a different article in details.
One of the key reasons for the surging ICO popularity is, in part, the lack of any regulations. However, as investors’ appetite for ICOs increased, global regulators started to express some concerns. Some of the nations have already been pushing for ICO regulation implementation, while others are still in a “wait-and-see” mode.
Moreover, some of the countries have a relatively positive stance in relation to the ICOs markets, seeing it as an opportunity to encourage innovation. However, there is also a number of nations that adopted a strict position when it comes to the ICOs, such as China. In fact, China has banned all ICOs on its territory back in 2017.
Now, the lack of regulation is not all that good as well. Thanks to the conditions that are currently existing in the ICO market, many fraudulent firms have been utilizing this chance to gain illicit profits. Just imagine, virtually anyone can create an ICO. This leads to a rising number of scam ICOs, as investors are also not protected from the possible losses due to the absence of the appropriate regulations.
See also: How to spot scam ICO?
While, certainly, one can try and avoid getting scammed by following the list of the potential ICO scam signs, the lack of regulation still implies a higher risk for investors. Fortunately, it might change quite soon.
2018 ICO Market Predictions
Back in 2017, some of the regulators have already considered the implementation of rules to help protect both investors and the ICO companies. For instance, the Commodity Futures Trading Commission (CFTC) has ruled out that Bitcoin is a commodity. The Internal Revenue Service (IRS) stated that Bitcoin needs to be treated like property for tax purposes. In addition, some of the US states have signaled they might approve acceptance and promotion of Blockchain and Bitcoin.
Some other regulators, such as the Department of Treasury, has intended to assess the Financial Crimes Enforcement Network’s (FinCEN) cryptocurrency practices related to money laundering and terrorism financing risks.
The key US securities regulator, the Securities and Exchange Commission (SEC), did not approve any exchange-traded products with cryptocurrencies.
In spite of almost no regulations in place, authorities have begun to analyze ICOs and other cryptocurrency-related products. The majority of the global regulatory bodies have come to realize the necessity of regulations. What does it mean for the ICO market in 2018?
First of our 2018 ICO Market Predictions is that the entities organizing the ICOs in the near future will have to be ready to prove the value behind their applications. This does not even include the normal value presentation, whitepaper. The abundance of the ICO projects in the market makes investors pickier in regards to the allocation of their funds.
Additionally, the markets might see constant enforcement against the fraudulent cryptocurrency applications and firms that launch ICOs.
The US is not the only country that already looks into the ICOs, cryptocurrency and Blockchain technologies. Many other nations have already implemented or issued guidelines for the ICO market operation. For instance, Austrian financial services regulation guidelines also cover cryptocurrency instruments.
In the same fashion, Australia wants cryptocurrency transactions to fall under the registration and regulations requirements this year.
There might not be any exact direction for the ICO market development as of now.
However, it is certain that most of the global regulators are planning to have some kind of rules for the ICO firms to abide by in place.
Do you want to share some other 2018 ICO Market Predictions? Do not hesitate to do so in the comments section below.