There are different companies all over the world that are gathering an important amount of funds with so called Initial Coin Offerings (ICOs). Mexico is also home of known projects that have used this new fundraising method with virtual currencies.
How is the ICO Market Growing
The second most important virtual currency in the market nowadays, Ethereum, was born from an ICO. EOS, for example, the 5th virtual currency by market capitalization has also been created after an ICO that last an entire year.
According to Tomás Álvarez, general director at Volabit, there are companies that are gathering more than 500 million dollars. ICOs work in a very similar way to Initial Public Offerings (IPOs). But IPOs have to pass completely different regulatory controls.
This is completely different to what ICOs do. In general, initial coin offerings do not have a tested product and they try to receive funds from investors all over the world. Once they receive these funds, or at least some part of them, they can start building their applications or products.
Álvarez mentioned that in Mexico there is an important ICO activity:
“There has been four or five Initial Coin Offerings. There are ICOs contacting investment funds that have been created to invest in these ICOs. Instead of buying stocks or debt, are buying ICOs.”
Moreover, he said that investors have contacted him to participate in these ICOs. But the analysis performed by his company did not find a good opportunity where to place their funds.
“Three or four projects were not going to work,” Álverez commented. “There is a project that is operating but I believe that the ICO price is high and nobody is going to cover the investment.”
At the moment of writing this article, July has been the month with the lowest amount of funds raised by ICOs. But in January, for example, $1.5 billion dollars have been raised through this method.
According to icodata, more than $6 billion funds have been gathered in 2018 by ICOs, and 967 ICOs have been launched solely this year. The number of funds raised has been decreasing during this year, showing a relation between the price of the cryptocurrencies and interest for ICOs.
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