ICOs Have Raised $2 Billion This Year – Mostly from Private Sales

ICOs Have Raised $2 Billion This Year – Mostly from Private Sales

Despite the quality of this year’s initial crowd offerings being patchy at best, investors’ appetite for them remains unsated. $2 billion has been raised already, placing 2018 on course to comfortably surpass 2017’s total of $5.7 billion. But with the structure of these sales now geared increasingly towards private investors, the public have been left to fight for the scraps. Data shows that 84% of all ICO fundraising this year has come from private and presales.

Also read: Crypto Index Fund Bitwise Delivers 45% Return in First Two Months

Private Sales Are Helping the Rich Get Richer

When crowdsales first emerged, they were presented as a democratic means of raising funds and creating a diverse, engaged community. For a while, that’s more or less how it played out, but in 2018 the ICO landscape has changed. Last year, private investors still got first dibs on the best crowdsales – BAT was notorious for selling out in minutes after a handful of whales took their fill of tokens – but this year, the public sale is almost an afterthought. All the action is taking place at the pre- and private stage, leaving slim pickings for the crowds.

ICOs Have Raised $2 Billion This Year – Mostly from Private Sales

Recent figures released by Tokendata show that of the $1.97 billion invested in ICOs this year, $1.63 billion – or 84% – went to private investors. Moreover, this data doesn’t take into account the reported $850 million being raised in the Telegram private sale, an event so exclusive that only the biggest of the big shots are invited. Telegram’s $600 million pre-sale finishes at the end of February, but already investors are supposedly flipping their token allocation for as much as 2x. Projects such as this are good for helping the rich get richer, but they fail to give the platform’s users a stake in the project.

ICOs Dispense Modest Gains

Of the 94 ICOs Tokendata has been tracking this year, 28 now have tokens available for trading on exchanges. At this stage, the average ROI for tokens purchased via ICO and sold on an exchange is a mere 2.17x, and the return on ETH is just 0.75x. In other words, it would have been more profitable in many cases to hold onto ether since the start of the year than it would have been to swap it for tokens. It’s still early days of course, and there’s plenty of time for the crop of 2018 to come good.

ICOs Have Raised $2 Billion This Year – Mostly from Private Sales

Thanks to the generous discounts applied during pre-sales, it’s a lot easier for private investors to turn a profit than it is for public sale participants. Moreover, with pre-sale tokens often ending up on decentralized exchanges immediately, the role of the public sale has been relegated to a footnote. On paper, crowdsales are more popular than ever. But in reality, their biggest benefactors are the 1% with the connections and the capital to profit.

Do you think it’s unhealthy for ICO tokens to be snapped up predominantly by private investors? Let us know in the comments section below.


Images courtesy of Shutterstock, and Tokendata.


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Russian Bank to Develop Blockchain-Based Payment System

blockchain

Everyone seems to be interested in Blockchain. It might even be more popular than cryptocurrency itself. Or is that too much of a stretch? Either way, there have been a number of companies and banks announcing pivots into the blockchain sector. Now, it seems the latest to make a move into the industry is Russian state-owned development bank Vnesheconombank (VEB). 

What’s Going On?

The world is now aware that the governor of Kaliningrad, Anton Alkikhanov, and the chairman of VEB, Sergei Gorkov, had a meeting last week at the Russian Investment Forum in Sochi. At the ...

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SBI Doesn’t Ban Credit Card Crypto Purchases Despite Issuing Warning

SBI Doesn't Ban Credit Card Crypto Purchases Despite Issuing Warning

SBI Cards & Payments Services Pvt. Ltd, the second largest issuer of credit cards in India, has warned customers of the risks associated with cryptocurrencies. Despite the warning, the company did not move to ban its customers from purchasing bitcoin and other virtual currencies using SBI issued credit cards.

Also Read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

SBI Cards Warns Customers of Crypto Risks

SBI Doesn't Ban Credit Card Crypto Purchases Despite Issuing WarningSBI Card has issued a warning to customers emphasizing the risks associated with cryptocurrencies. SBI Card also sought to reiterate the position of Reserve Bank of India, stating that government advisories have not given any licensing or authorisation for any entity to operate in any cryptocurrency schemes or virtual currencies.

The announcement comes weeks after Citi India banned the use of its credit and debit cards for the purpose of purchasing bitcoin and other cryptocurrencies., at the time issuing a release stating “…Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, crypto-currencies, and virtual currencies.”

The notice states “Given concerns, both globally and locally, SBI Card would like to advise you to be mindful of potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with crypto-currencies and virtual currencies.” SBI currently has a customer base of over 5 million, and is the second largest credit card issuer in India behind only HDFC Bank Limited.

Indian Crypto Regulations Expected Soon

SBI Doesn't Ban Credit Card Crypto Purchases Despite Issuing WarningNumerous Indian officials have indicated that India’s long-awaited regulatory guidelines for cryptocurrencies are presently being formulated by the relevant institutions, and that the industry can expect said legislation to be implemented soon.

The Chairman of the Department of Economic Affairs, Ajay Tyagi, recently indicated that many aspects of the regulatory apparatus have already been developed, stating “We have actually decided which regulator will do what and the committee should come out with the regulations very quickly.”

The impending regulation has not been welcomed by all members of India’s cryptocurrency authority, with many traders seeking means through which to purchase virtual currencies overseas in an attempt to bypass India’s regulatory jurisdiction.

Do you think many banking institutions will continue to allow customers to purchase cryptocurrencies using credit cards? Share your thoughts in the comments section below!


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Stellar (XLM) and Lisk (LSK) Plummet

Stellar (XLM)

Most of the cryptocurrency market remained quite stagnant in price fluctuations throughout the day. Most coins were only seeing minor gains/losses aside from Litecoin (LTC). However, as the working day comes to a close, two top coins are seeing major losses, and many are scratching their heads.

Stellar (XLM) has a lightning fast cross-border payments system and is set to be a strong contender for the coin of the year, with a strong support group. However, the coin is losing some major steam on the market today. Lisk (LSK) just rebranded today, yet its price is ...

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Tim Draper on Bitcoin: “Why Would I Sell the Future for the Past?”

Tim Draper on Bitcoin: “Why Would I Sell the Future for the Past?”

One of the most intriguing things about the cryptocurrency space is the diverse, eclectic, and often eccentric characters it attracts. Everyone from Wall Street brokers to cypherpunks and from industrialists to anarchists can be found staking their claim in the fledgling crypto economy and saying their piece. In a recent interview, venture capitalist Tim Draper was on fine form, producing a number of memorable quotes which encapsulate the bullish mood permeating the cryptoverse once more.

Also read: Kathleen Breitman: Tezos Will “Go Rogue” and Launch Soon

Hodling the Future in Place of the Past

“I think bitcoin is the future currency,” opined Tim Draper on Thursday. In a typically upbeat interview, the entrepreneur, whose net worth has been placed at $1 billion, had a lot of nice things to say about bitcoin. In the most quoted segment of his Bloomberg interview, Draper reasoned, ““People ask me, ‘Are you going to sell your bitcoin [for fiat]?’ and I say, ‘Why would I sell the future for the past?’” This augments previous remarks when Draper was quoted as saying: “I don’t know why anyone would want to go back to fiat when crypto is distributed, secure and global, while fiat is subject to the whims of political forces”.

Tim Draper on Bitcoin: “Why Would I Sell the Future for the Past?”While bitcoin’s status as a pure currency is a matter of some debate, it and the crypto assets it shares a space with are forming a new class of wealth storage and money transfer that offers a viable alternative to the status quo. Like most business moguls who are heavily invested in crypto – Michael Novogratz; the Winklevoss twins – Draper is very bullish about where bitcoin is going. The 59-year-old made his money at Draper Fisher Jurvetson, the venture capital firm famed for its investment in billion-dollar startups.

Fortune Favors the Brave

More than 30 years since Draper founded his company, which oversees assets of $5 billion, he’s reinvented himself as a crypto entrepreneur willing to put his money where his mouth is. An entrant in Forbes’ recent Crypto Rich List, Draper made much of his crypto wealth through having the perspicacity to snap up the Silk Road bitcoins auctioned by U.S. Marshals in 2014. He was fortunate, of course, to have the capital and the accreditation required to acquire those 32,000 bitcoins, which now look like a snip at $18 million.

Tim Draper on Bitcoin: “Why Would I Sell the Future for the Past?”For all the success that foray brought him, Draper’s immersement in all things crypto hasn’t been without its controversies. A high profile backer of Tezos, he’s been forced on the defensive as delays have dragged on and the lawsuits have piled up. One of the biggest bones of contention with the Tezos affair is the extent to which bitcoin has since grown in value. This has benefited Tezos but has done nothing for the investors who parted with their BTC last year on the promise of XTZ tokens.

When questioned about bitcoin’s volatility on Bloomberg, Draper brushed aside suggestions that this was a turn-off for “regular people”. Instead, he chose to focus on the confidence he has in bitcoin, averring: “My bitcoin is more secure than my dollars in the banks…my bitcoin is very secure”. While some entrepreneurs, most notably Steve Wozniak, have conceded that the rough and tumble of the cryptocurrency markets is not for them, Tim Draper seems to be enjoying the ride, and has no intention of selling “the future for the past”.

Do you think Tim Draper is correct to call bitcoin the currency of the future? Let us know in the comments section below.


Images courtesy of Wikipedia.


Bitcoin is a decentralized digital currency that enables near-instant, low-cost payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network. Read all about it at wiki.Bitcoin.com.

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