Maitland/AMO ICO Monitor – 8 November 2018
The Big Read
Bloomberg’s Aaron Brown comments that the large majority of dollars raised by ICOs are committed to viable projects, and overall success levels are comparable to conventional software development projects and early stage venture. This runs counter to the findings of a damning EY report, which found that traditional IPOs greatly outperformed ICOs in 2017, purely in terms of financial performance. We will have to wait a few years for a fairer evaluation of ICOs’ performance, argues Brown.
Brendan Markey-Towler, a professor at the University of Queensland, argues that the new digital currency Initiative Q is an interesting experiment, although not likely to make you fabulously rich. Unlike Bitcoin, Q does not rely on a decentralised system to manage a virtual ledger of transactions, and will therefore be better able to counter fraud and avoid wild fluctuations in value. However, this opposes a key principle of many cryptocurrencies, to avoid any single group holding power over the system.
Despite the cryptocurrency market losing 75% of its valuation throughout 2018, crypto hedge funds are still raising hundreds of millions of dollars. Earlier this month, Grayscale Investment raised more than $330m from new and existing investors. Grayscale claimed that Bitcoin’s price drop has had minimal impact on the company’s client base, claiming that the slowdown of crypto prices has actually enabled them to broaden their relationships.
Crypto wallet provider Blockchain has said it will stage the “largest crypto giveaway in history” by distributing $125m in Stellar lumens to wallet holders who sign up for the airdrop. With this, Stellar become the first partner for Blockchain’s airdrop program announced last month. While some might see the drop as an effective way of boosting the firm’s customer growth and wallet usage, Blockchain CEO, Peter Smith, said that it is part of an effort to put “users first”. Stellar Development Foundation co-founder Jed McCaleb said that the foundation believes airdrops are key to building a “more inclusive digital economy.”
New Kid on the Block – The Technologies, Funds and ICOs you should know about
In collaboration with 87 token projects and 12 exchanges, CoinGecko has launched Beam, a highly functional communication channel for ICOs, blockchain projects and crypto enthusiasts. The channel will allow users to easily follow and receive short project updates without having to trawl through social media sites and project blogs, with the aim that crypto investors have access to unbiased information, making it easier for them to know the most credible token projects to invest in. The development is seen as a welcome boost in the current bear market.
ROCKZ claims to be the first cryptocurrency paired to the Swiss Franc, one of the most stable fiat currencies in the world. The company behind it, Alprocks AG, has partnered with Geneva Swiss Bank, and will reserve 90% of its own funds in a high-security vault to guarantee the worth of the new token, while the remaining 10% will be stored in other Swiss banks to secure liquidity. The company hopes the new coin will become an investment tool for storing value assets.
Scams, Sanctions and Suspicious Activity
Turkish police have arrested 11 suspects following an alleged hack of crypto accounts, after victims reported losses of more than $80,000. Cybercrime units identified suspects by tracking new SIM card numbers registered to crypto exchange accounts, and also tracked suspects who tried to withdraw stolen assets from ATMs and banks. The Turkish population has become increasingly attracted to buying cryptocurrencies following the collapse of the Turkish lira earlier this year.
A lawsuit has been filed against US rapper T.I. and businessman Ryan Felton, following their involvement in a fraudulent cryptocurrency scheme. Felton and T.I. created a virtual currency called FLik Token in August 2017, and convinced investors to invest $1.3 million into the currency as it would rise to a price of $14.99 within 15 months. However, FLik Token crashed to a value of less than a penny by August 2018.
Bulls & Bears of the week
“The approval of a Bitcoin ETF will open the floodgates for new investors to pour billions of dollars into cryptocurrencies with the same ease in which they invest in stocks and all other mainstream asset classes.” – Oliver Isaacs, tech entrepreneur and influencer
“For now, it seems like the selling pressure keeps on pushing the price down. As for a bottom, bitcoin has maintained a hard floor at $6K for most of the year, which I would be surprised to see broken." – Clement Thibault, senior analyst at Investing.com