The first few months of 2018 weren’t particularly good news for initial coin offerings. After reaching a peak towards the close of 2017, ICOs gathered some unwanted attention from financial regulators, with authorities across the world seemingly responding to the growth in investment around token offerings.
As a result, month on month totals of money raised through ICOs have been declining in 2018 – until now.
May has reversed the trend, according to data collated and published this week. The total raised through ICOs in May outstripped that of April, the first time this year that the total has increased on the month.
In May, as much as $715 million was raised through ICO events, compared to $516 million in April. This represents a 27% growth on the month, in spite of a number of challenging conditions for ICOs and the companies behind them.
ICOs offer cryptocurrency tokens, with companies using them to raise capital from eager investors. However, some financial regulators, such as the Securities and Exchange Commission, consider this to be a form of security – something that requires regulatory approval before being offered to investors.
The tightening regulatory regime has been met with action elsewhere, including bans from Google and Facebook on advertising ICOs and other cryptocurrency promotions. This makes the findings all the more important, given that ICOs are now launching in more difficult conditions than was previously the case.
Despite the declining trajectory, the over $5 billion in funds raised by ICOs in 2018 so far have already reached over 80% of the levels raised in 2017, and few would now bet against the total surpassing that level in the near future.
The average per ICO has also declined to just over $6.5 million, down from over $7 million in 2017, with the growth this year coming from an increasing number of ICO events.
Nevertheless, the news indicates a steady or growing demand from investors for ICO investment, and with more companies pioneering ICOs this year than last, there seems to be no waning of appetite from those launching ICOs, either.