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ICOs Are Heading to Their Graves

Maya Mandzikasvili | Feb. 14, 2019
ICOs Are Heading to Their Graves

February 14, 2019, | AtoZ Markets - In a recent interview with one of the U.S. media outlets Barry Silbert, CEO, and founder of Digital Currency Group and Grayscale Investments reported that most of the digital tokens will have no value in the long run. Was Silbert statement right and whether ICO has any future?

ICO and digital token purpose in the brief

In a telephone interview, Silbert said the following:

"I do not believe in the vast majority of digital tokens, and I believe that most will go to zero. Almost every initial coin offering (ICO) was just an attempt to raise money, but there was no point for the main token."

Silbert, in a sense, is right; ICO was originally created as another idea of crowdfunding a way to raise funds for organizations that specify in digital currency and blockchain. This includes moving other digital assets on a markdown or token in case if the cryptographic project succeeds and is appreciated. At that moment, when an organization issues its own crypto with an indication of the reason for funding, it most often throws out a certain amount of crypto tokens, and after that, it subsequently moves these tokens to a crowd-oriented group, this may well be fiat currency also. As a result, the association receives capital, and the crowd receives its crypto tokens as offers. In addition, they have a full liability in respect of the shares.

Initial Coin Offering losing its positions on the market?

In late 2017 - early 2018, ICO experienced a boom, followed by an economic downturn when prices fell, and state and federal regulators had to crack down on projects contrary to the securities laws. Earlier today, another well-known media reported that ICO listing portal's data showed that ICO estimates fell to the levels just above the levels observed in January 2017. The data showed that last month 291.6 million dollars were collected with the help of ICO, which is about 19 times less than it attracted 5.8 billion dollars. in March last year. Despite his negative views on ICO tokens, Silbert is still optimistic about Bitcoin (BTC), in which he was reportedly one of the first investors. Although, according to Silbert, Bitcoin has a “really terrible technical card”, it “won the race for digital gold”. Mike Novogratz, a former partner of Goldman Sachs and the founder of the cryptocurrency bank Galaxy Digital, said that Bitcoin is unique among cryptocurrencies. Regarding the use of Bitcoin as a potential cost battery, Novogratz said:

“Bitcoin will become digital gold, a place where you have sovereign money, this is not American money, this is not Chinese money, but sovereign money. Sovereignty is expensive”

Silbert's digital currency group is one of several companies that formed the Blockchain Association, supposedly the first lobbyist group representing the blockchain industry in Washington, DC. Other founding members of the organization are the exchange of cryptocurrencies and the Coinbase wallets service, as well as the Protocol Labs launch technology.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.