Brian Kelly, founder and CEO of investment firm BKCM LLC, called most of the current ICOs that raise millions of dollars overvalued in a recent interview. He believes that the market has already reached the next stage, as many ICOs have begun to adhere to much higher standards than those held at the beginning of the year.
Kelly believes that, with the end of controversial and sometimes even fraudulent ICOs, the coin offering model will continue to work, but will be constantly subject to change.
“ICOs will remain, but they will change a little. Those who would like to write a white paper and get $30 million for it are probably already too late.”
Kelly also shared the details that he takes into account when deciding whether to invest in a project. Among other things, he cited the promotion of activities that promote adoption of the technology, as well as the frequent presence of ICO representatives at various conferences.
Despite regular news of missing investor funds or broken promises (the most disheartening was a report published in July, according to which 80% of all ICOs can be classified as fraudulent), the overall market condition remained strong throughout the year.
The number of ICOs in 2018 is double that of last year, and developers from almost all industries are trying to break into the cryptocurrency market because they believe they can make easy profits. At the very least, the ICO model provides a fast and efficient way to raise funds for projects, as opposed to the slow approach of attracting investors and venture capitalists.
According to Brian Kelly, ICOs cannot guarantee high returns for investors. Those who hope to hold coins as a long-term investment in a project are especially affected. According to a study conducted at Boston College, half of all ICOs fail after entering the market. Most of the investor profits in such ICOs were received in the first two weeks, and those who did not manage to sell within this period, in many cases, simply lost all their invested assets.
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