Sales of Digital Currency From January to May 2018 Total $13.7 billion
PWC’s strategy and consulting division, Strategy&, in conjunction with Switzerland-based Crypto Valley Association released a report on Thursday which revealed that digital currency sales for January-May 2018 came in at $13.7 billion.
This total amount was recorded to be twice as much as the total amount raised on sales throughout last year. The Blockchain is the underlying technology and digital ledger for bitcoin and other cryptocurrencies which serves as an avenue on which transactions can be carried out and recorded.
The report which will reportedly be published quarterly indicated that the tech start-ups in the blockchain industry globally raised funds either by selling their digital currencies or tokens to investors directly in initial coin offerings (ICOs). By selling directly to investors, the start-ups were able to dispense the need for venture capital firms or banks as middlemen.
The report indicated that the first five months of this year recorded sales of tokens of about 537 different coin offerings which was more than the total $7.0 billion in 2017. The total amount included the huge offering that was gotten from Telegram, an application founded in 2013 by Russian entrepreneurs Nikolai Durov and Pavel.
It also included Block.one’s EOS. Sources reported that Telegram raised $1.7 billion without putting its tokens up for sale on the public market. EOS which is an infrastructure project specially developed for decentralized applications also allegedly raised over $4 billion in a token offering that began mid-2017 and both offerings were regarded as the first true initial coin offering unicorn.
The report further noted that of the total 3,470 initial coin offerings ever put out since the debut of token sales in 2013 and only 30% had reached successful closing while several others encountered delays while others llost interest during the offering process. Also according to the report, some companies faced significant difficulties such as legal or regulatory issues after launching ICOs.
US Remains Foremost ICO Destination
The ICO report indicated that even though Singapore and Switzerland remained the leading initial coin offering activity hub, the US, however, topped as the leading ICO destination as it raised about $1.1 billion from the 56 token sales that were registered in the US from January to May 2018 and was reinforced by firm and explicit regulatory requirements.
Media outlets stated that the report’s fundamental message was that more ICOs were being registered with the US Securities and Exchange Commission (SEC). Thus, it was emphasized that even though Switzerland maintained its position as Europe’s ICO capital, the UK had recorded more success regarding volumes and numbers as it had about 48 ICOs registered and had raised approximately $507 million.
Crypto Experts’ Opinions
As stated by Oliver Bussmann, the President of the Crypto Valley Association, the report was an indication that Switzerland remained the foremost hub for blockchain and initial coin offering activities as it was the model jurisdiction regarding the establishment of regulatory provisions governing the digital currency sphere.
He further stated that Crypto Valley located in Switzerland perfectly maintained a balance between accepting the different blockchain technology as well as the viability of ICOs on the one hand while also embodying the Swiss values on issues such as confidentiality and protection of privacy on the other hand.
While explaining the necessity of the report, Fintech Leader Switzerland, Head of Blockchain EMEA at PwC Strategy&, Daniel Diemers stated that the report highlighted the increased awareness and popularity of ICOs worldwide in 2018 evidenced by the success of the digital currencies in the first five months of 2018.
Diemers added that after all the awareness raised in 2017, 2018 could be pointed as the year when the initial coin offerings sector became more grounded and established, and there was visible improvement in the focus on quality business practices, legal provisions, fundraising and investor relations.
He also stated that the Hybrid models born out of the combination of ICO financing and Venture capitals were increasing people’s understanding of what could be gotten from both ventures. He added that this hybrid provided some form of validity to businesses when its market potentials are established by the crowd support it enjoys.
Diemers further stated that the quarterly report which would be released on initial coin offerings globally would continue to keep track of the developments and alterations in the industry and how it brought about visible changes to various industries globally.
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