Opinion Piece: Outlook for ICOs in 2018

A retrospective look at the Initial Coin Offering (ICO) space in 2017 shows a very vibrant market. The year has seen more inflow of capital than any previously with over $4 billion raised by projects that issued tokens.

Despite the impressive sums of capital that flowed into ICOs this year, it remains a difficult market to accurately predict all the time. The crypto world in general is both fast moving and fast changing as such trying to make predictions can sometimes prove challenging. This became glaring as some ICOs had to constantly make adjustments to their targeted fund raising amounts, dates and even sometimes the entire structure of their ICO and token sale campaigns.

The ICO market is still pretty much in its very early stages and yet to fully take form and shape and as such similar trends are likely to be repeated next year. The ICO market will remain attractive to start-ups and early stage companies as an avenue to raise funds as opposed to the traditional Venture Capital (VC) medium.

In 2018 we will see some established companies also launch their own tokens and crowdsale events in order to raise extra capital quickly to help with the expansions of their operations and to ultimately get on the blockchain technology bandwagon as part of moves to innovate and not get left behind in the era of new age technology. Existing VC firms and financial institutions might have to tweak their operations in order to stay relevant and compete with the new ICO mechanism as more and more enterprises will see it as an alternative to existing fund raising avenues.

In November of 2017, the ICO market witnessed an all-time high in capital injection of about $750 Million in investments. November also saw a significantly higher number of ICO projects as compared to that of October.

The first quarter of 2018 will see an array of ICO projects with exciting value propositions on blockchain. Some enterprises already began their ICO campaigns for the first quarter of 2018 as far back as October.

We will also witness the usual volatility with bitcoin prices in the first quarter due to a cocktail of factors which includes the Chinese New Year holiday to happen somewhere in the middle of February – Bitcoin price will more likely experience a pull-back as a result.

The Second quarter will see the possibilities of some notable cryptocurrencies such as Bitcoin and Ethereum reaching significantly new price highs. There will also be further exploration into alternative trading systems (ATS) for security tokens trading.

The grandfather of new age cryptocurrencies Bitcoin is projected to continue its ferocious rise especially within this quarter. There is a high possibility of it reaching a figure of $35,000 and over. This price appreciation will also positively impact the values of other cryptocurrencies and digital assets.

The rise in the price of Bitcoin can be both to the advantage and disadvantages of ICOs. Some people might set aside a portion of the profit they make from the rise in Bitcoin price for purchases into ICO tokens in order to diversify their portfolio whiles others might instead pile up more of their funds in Bitcoin with an expectation of further bullish runs.

The third and fourth quarters predictions are still pretty much far-fetched especially for the fast-paced and fast changing cryptocurrency world. Several ATS licensed security tokens will be available for trade particularly in the US. Smart holders and investors of BTC and ETH might want to take advantage of this by taking positions in some of these security tokens. Market activities for the third and fourth quarters will be largely dependent on events of the first and second quarters as well as expected happenings in the first quarter of 2019.