Last month, the money which was raised by ICOs was just $ 300 million. It seems like the ICO trend is definitely reducing. Start-up Companies raised just $ 300 million in May 2017. This is clearly an indication that the ICO model is slowly becoming extinct. The reason for this is that many different ICOs have burned the fingers of investors. That is why; investors are not any more excited about ICOs as well.
ICO trend subsides:
Moreover, many of the countries are monitoring the ICOs which are being launched by the companies that are based in their country. This is after investors lost millions of dollars through ICOs. The countries are not shying away from prosecuting the companies which are marketing fraudulent ICOs as well. This is one of the main reasons why this model of raising capital is in the downtrend. Not many companies are going ahead with their ICOs.
On the other hand, investors are also not that excited after the cryptocurrency slump. As the established cryptocurrencies and well-known cryptocurrencies are also performing pretty badly, investors are wary of investing in new cryptocurrencies through ICOs. This is one of the main reasons why the ICOs are not receiving a similar response as they were earlier.
Ethereum (ETH) problem plague ICOs:
Many of the ICOs are based on the Ethereum platform. However, in recent times Ethereum (ETH) has faced many problems as well. Scalability has been an issue. The network has been slowing down as well. This is another reason why the companies are not going ahead with their ICO plans as well. As a result, they are not launching their ICOs as well.
On the other hand, the overall slump in the cryptocurrency market is also scaring away investors. The investors who have burned their fingers with the mainstream cryptocurrencies, as well as earlier ICOs, are not looking to invest in any more ICOs as well. This is the reason why the amount of money which is being raised by ICOs and getting lost, is also on the lower side. This is a clear indication that companies are not considering it is a viable model for raising capital.
With the regulatory oversight also increasing, it is becoming difficult for the companies to abide by all the rules and regulations in order to launch the ICOs. This is another reason why they have decreased considerably.
It seems like in the coming few months, the ICO activity will decrease even further.