PricewaterhouseCoopers (PwC) is one of the Big Four accounting firms, alongside KPMG, Deloitte and Ernst & Young (EY). PwC reportedly raised $13.7 billion for 537 ICOs in the first five months of 2018.
Where did the $13.7 billion come from and where did it go?
The report quoted Daniel Diemers, director of blockchain EMEA at PwC, stating that despite a 70% correction in the cryptocurrency market, ICO-related activities actually increased in 2018.
The PwC report is titled “ICO: Strategic Perspectives” and its contents are as follows:
“The researchers highlighted the continued growth and popularity of the global ICO in 2018. A total of 537 ICOs were conducted in the first five months of this year, raising a total of $13.7 billion, more than the sum of all ICOs before 2018.”
The vast majority of the funds raised in the 537 tokens were from investors who already held a lot of Bitcoin and Ethereum, since most ICOs require investors to invest through Bitcoin and Ethereum.
ICO monthly data
Contrary to what many analysts and investors say, ICOs are like an endless cycle in the capital market. Although ICOs do cause investors to put a lot of BTC and ETH on the market, these funds will be purchased again by investors and then funded by other ICOs. New capital is not injected into new tokens, and existing players in the cryptocurrency market use their cryptocurrency to invest.
In February, Fortune magazine reported that about half of ICOs have failed and died since 2017, disappearing from the global cryptocurrency market. Throughout 2017, the ICO’s failure rate reached an alarming 46%. If projects disappear without community support and sufficient funds were taken into account, the failure rate would soar to 59%.
ICO market is improving
Diemers has conducted extensive evaluations and research on the emerging blockchain projects and the current state of the cryptocurrency market. He stressed that as ICO-related laws and regulations and investor structure will improve in the upcoming months, ICO’s failure rate will decline, and more projects will be successful with the support of appropriate partners and investors.
“After the enthusiasm of 2017, this year’s ICO industry has become more mature and standardized, and has made progress in terms of business models, laws and regulations, investor structure and financing methods. The mixed mode of venture capital and ICO financing is becoming more about combining the advantages offered by the two approaches. The robustness of this business model will be verified when it is supported by the public to achieve its market potential.”