IPOs Beware… Security Token Offerings are coming to take your place!
The crypto-market is on the verge of a third wave; the first being Bitcoin, second is ICO and now STOs. Â The hype around the ICOs could not sustain itself in the crypto world. Though the concept of blockchain has become known around the world due to the funds raised by companies. However, according to the China Academy of Information and Communications Technology, 92% of the ICO projects have failed. Let me repeat.92% of Blockchain Projects have failed.
The data mentioned is staggering. The reasons not only include scams but also includes reasons of feasibility to the adaptation of technology to the project and the inability to attract the institutional investors to achieve real-life blockchain applications. The real distress among institutional investors to enter crypto-space was due to the question arising from the so-called utility coins.
“Where does cryptocurrency fit into the SEC regulations? Is it securities or not? What does the word utility mean? If you are raising funds via cryptocurrency, this must be securities”.
With recent ruling of SEC declaring Ripple as not as securities, it has gathered mixed reactions from the ever-expanding crypto-community. The volatility of the crypto-market can be attributed to the uncertainties on the position of cryptocurrency coupled with increasing crackdown on ICOs. With more than $1 billion dollars dumped with $273 million claimed as losses, investors especially the institutional fund managers are fatigued and hesitant to step into the crypto-market.
Leading investment companies like BlackRock, Morgan Stanley and Goldman Sachs understood the importance of blockchain and the cryptocurrency market. They are keen on improving the efficiency of the financial and banking sectors. The solution to creating a transparent, immutable and secure market lies in Tokenizing everything. The old guards of the financial sector are moving into the new wave of security tokens.
The biggest encouragement which has come in is the governments’ role in regulating cryptocurrencies. Countries which have been against cryptocurrencies have understood that there is no point in controlling the evolution into digitization of assets.
The principle of the financial markets is simple. Anything which gives you 100x or 200x returns is subject to pump & dump, scams, and other illegal activities. In addition to this, the volatility of the market has caused Bitcoin’s love-hate relationship in the past year with investors, leading to a strained crypto-environment. The price of Bitcoin was soaring to $20,000 dollars last year, boosting prospects of ICOs. Now, it is struggling to touch $7000, creating a negative environment for any new ICOs and funding for real and feasible projects.
What we know now, is that blockchain is progressive, cryptocurrencies are securities and there is a need for tokenizing everything. When you combine the above three points, you get security tokens. The need for security tokens will enable an entirely new set of investors into the cryptocurrency market. The digital assets will be open to the financial markets to global investors including institutional investors. It is time for the $256 trillion traditional financial markets to enter the world of tokenization.
So what is the problem you may ask? Why are we still stuck with shitcoins of ICOs or with the traditional markets where the technology is obsolete? Why aren’t ICOs dead and Security Token Offering
(STOs) have taken over?
There are three major reasons;
Flawless Technology,
Uncertain Legislations &
Non-availability of Exchanges. So what do we do about it?
It is as simple as getting in touch with Blockchain App Factory, where you can create a security token on your own blockchain or an exchange that supports security tokens as well as utility coins. The security token industry is a blossom. When the security tokens hit a $10 trillion dollar industry by 2021, remember the name: Blockchain App Factory.
Get in Touch with Blockchain App Factory :
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