Towards the end of 2017, the world was left pretty confused (and went all-in) about how ICOs and digital tokens were the next big thing. Since the dawn of the stock exchanges, the stock market had been typically running in the exact same way, in a shell of national boundaries set by the respective countries. In this blog, we will talk about ICO Softwares, ICO Development Services and we will know what to expect from ICOs in future.
Before we take things forward, the basic need of a crypto market, over a country’s general stock market, must be understood. The crypto market provides a medium where you can trade without any boundaries in the currency (coins, tokens) of your choice. The value of the coins/tokens fluctuates on the amount people are investing in them (the market capitalization). Crypto has set up a medium for currencies which are global without boundaries, to take over the world.
So, are ICO’s same as IPO’s?
Initial Coin Offerings (ICO) in the Crypto market is similar to Initial Public Offerings (IPO) in the stock market. The difference, however, remains complicated. In the stock market, you trade in real/paper currency, you can buy a share in the company of your choice using paper currency. While in the crypto market, the coins issued in ICOs are a currency of their own and their value depends on the amount of money people are spending to buy (or invest) in them.
With ICO’s, the money has a high probability of increasing or decreasing, as compared to the stock market, the market capitalization in the crypto market is volatile and includes a lot more factors than generic stock markets.
Similarities between ICO and Stock Market?
The ICOs are very similar to a crowdfunding scheme, it starts before the company actually achieves anything practical. To support their ICOs, companies usually present flimsy white papers’, and hire blockchain developers.
The revolution brought by the crypto market to the stock market is one of the greatest revolutions of the century, but as the old man loves his old spot, people will learn to adapt and adjust to the revolution, at their own pace. The Crypto market has been pretty slow since the boom and the downfall, between December 2017-February 2018. The total market capitalization from the past few months had been hovering around $100 -$150 billion.
What factors are holding back ICO’s?
The greatest problems with the Crypto market from what we believe, are the whales. Whales are the big investors who manipulate the market according to their needs. However, a recent hovering study suggests that it’s these whales that make the market less volatile. From what we have observed how the market works had been widely affected by these whales, they seem to start a domino effect in the trade market.
Unfortunately, the recent price crash in the Crypto market is affecting the sentiment towards the ICO market. Two things are not related but the sentiments are affecting the market. We believe that the next wave of ICO will be in the security token market. The security token is one of the substitutes for holding actual shares in the company. The startups can raise money and offer investors a real share in the company, this way, investors will feel more assured about investing money as they know they are getting something of real value.
Looking ahead to the future
ICO’s will continue to flourish in the crypto space one way or the other, previously ERC20 protocol used to dominate the market. This year, there might be time for security tokens to dominate the start-up scene. If the crypto market recovers in time than there can be the possibility of Ethereum tokens to make a comeback. But if the crypto market takes too long to recover, start-ups might shift their focus towards security tokens to raise money.