This year’s selloff in virtual currencies has done little to dent investor enthusiasm for initial coin offerings, which attracted a record $US12 billion in the first half.
That’s up from $US7 billion for the whole of 2017 and a more than 50-fold jump from 2016, according to Autonomous Research LLP.
ICO Growth on a Tear
Amount raised by June 2018 almost double 2017 total
Source: Autonomous Research
Note: Only includes ICOs that raised more that $US1 million
Investors piled in even as Bitcoin fell as much as 70 percent from its December peak, many smaller tokens lost nearly all their value, and global equity markets slid on fears of a trade war. Much of the enthusiasm centred around two big offerings: EOS, a platform for open-source projects, and Telegram, a messaging service.
While bulls are hoping for a repeat of the eye-popping ICO returns seen in 2017, many of the blockchain-related projects funded by the offerings are likely to fail, said Lex Sokolin, global director of fintech strategy at Autonomous.
“This is a high risk sector,” Sokolin said by phone. “It is early stage tech and lots of it by definition is going to die.”
This story first appeared on Bloomberg.