The Initial Coin Offerings (ICO) are token sales and have great similarities with Initial Public Offerings (IPO) for listed companies, except that ICOs are not subject to the same regulations as securities everywhere on the globe. Cryptocurrency ventures will issue a certain percentage of the tokens that represent the value of the underlying assets, accepting either virtual or fiat currencies for funding. ICOs have already helped companies raise almost US$ 4 billion this year.
While investing in ICOs can be extremely profitable, if we take the example of the Ethereum blockchain, for example, they are also pretty technically scary, volatile and poorly regulated.
In Asia, Singapore is leading the way when it comes to raising funds using cryptocurrencies. Funderbeam featured Singapore as the 3rd largest ICO hub in the world this year and the largest in Asia.
Notable ICOs include TenX, a multi-blockchain wallet that partnered with Visa to make cryptocurrencies spendable in the “real world”. The Singaporean startup raised US$80M with their ICO, with tokens tradable under the PAY codename. OmiseGO (OMG) is one of the largest Asian market cap with a staggering US1.3B (as of December 22nd 2017). The Thai white label payment service has the objective to “Unbank the banked” with its new funding.
While Asia is a real driver for growth in the ICO world, one of the latest game-changing move came from the US.
The crowdfunding website Indiegogo, created in 2008, is moving into blockchain and cryptocurrency investments. The platform, that has raised more than a billion dollars over the last decade, has decided to follow the hype of blockchain enabled crowdfunding method: ICOs.
Indiegogo’s decision to support ICOs acts as a stamp of trust for this alternative fundraising method and the promise of its democratization.
To fight the mistrust that coin offerings suffer from, Indiegogo plans to treat the supported ICOs in the same way it treats equity crowdfunding, meaning SEC compliant (for the USA at least) and to use its expertise and experience in investments to assess the potential and credibility of funds seekers.
The first ICO Indiegogo is promoting is called the FCFL (Fan Controlled Football League) and can be seen as the next generation of fantasy football, where fans get to choose everything in real time with their phones for the real players to act on.
Mainstream investment platform moving into ICOs could mean a lot. As the companies create their tokens, they enable almost anyone to be a part of the investment opportunity, unlike traditional stocks, often available only to a few. The future of finance is heading towards more inclusion both as a mean of storing, sending and lending money but now also investing.