What was the ICO market like in Q3 2018?

Private funding in ICOs made significant strides in Q3, 2018 with the number of rounds doubling as compared to 2017

Private funding has seen ~100% growth in 2018 as VCs go long on ICOs. ICOs at the end of Q3, 2018 have collectively raised ~$4.1B which is almost the double of what was raised in 2017. Number of VC backed companies are up by ~17% in Q3, 2018.

Funds raised in ICOs by quarters(Source: InWara’s Database)

Top investors like Fenbushi capital, Pantera capital, Blockchain Capital, Andreessen Horowitz and more have invested briskly into interesting projects in the crypto space.

Crypto companies seem to have come to the realization that professional investors “may not be so bad after all”. Public ICOs, which once used to allow everyone to invest, are swiftly changing their course to a new approach of limited, private sales that allows only accredited investors and close connections to participate.

Many top ICOs like Telegram, Dfinity and more, include no public sale component today, with retail investors forced to wait until a token is listed on an exchange before they can buy it.

Industry downturn cuts into ICO numbers

With over $20B raised by ICOs in the last 2 years, this can be seen as an indication of the adoption of digital currency across various sectors. However, 300+ main- and pre-sales have now been postponed due to the lower value of the investing currencies (BTC, ETH) due to the bear market.

Number of ICOs by quarter(Source: InWara’s Database)

Concluded ICOs, with their raised capital stuck in dwindling currencies, witnessed their wealth being eroded in rapid fashion and some are in tough financial positions.

However, ICOs have gained remarkable traction as a fundraising tool. Even with Q3 being the slowest quarter of 2018, companies still conducted 170+ ICOs.

Market matures with the contraction of ICO volumes in the overall space

USA continues to lead the pack with Singapore creeping ahead of UK in overall ICOs conducted, presenting genuine promise for Asian markets. Massive contractions in Q3 were seen in Estonia, Switzerland, and Canada.

Number of ICOs by Country (Q2 2018 vs Q3 2018) (Source: InWara’s Database)

Africa remains slow adopters with almost negligible coverage in the space.

Q3, 2018 ICOs in dangerous waters

Only 20% of Q3 ICOs see listings on exchanges, while the number of exchanges grew by almost 25% (2018 vs 2017). This is a potentially dangerous scenario for investors as they could be stuck with tokens and no liquidity to sell.

ICOs getting listed by quarter (Source: InWara’s Database)

It is worth noting that listing on an exchange or otherwise may represent a strategic choice by ICOs, as opposed to a lack of exchanges willing to list tokens.

For the full breakdown, see InWara’s Q3, 2018 report.

Private funding by country

The USA remains at the fore of the crypto space in terms of number of private funding rounds by country

USA dominated the marketplace with 200+ private funding rounds in Q3, 2018, mostly because many big-name VCs operate out of USA. Asia takes the lead over Europe in private funding rounds with both China and Singapore seeing ~150 rounds of funding.

Number of private funding rounds by country (Source: InWara’s Database)

Regular VCs now seem to be making blockchain “plays” as an extension of their regular operation, while there are fewer pure blockchain-focused VCs.

Industry sector outlook

Blockchain technology has gained traction in Q3, 2018. Financial services retain the top industry position with ~100 ICOs in Q3

Financial services remain the most popular sector in ICOs, while other sectors like Healthcare and Trading have seen growth with multiple crypto-based funds springing up in Q3 2018.

No. of ICOs by Industry (Q2, 2018 vs Q3, 2018) (Source: InWara’s Database)

In Q3, 2018, many corporations have emerged with a vision to develop diverse blockchain solutions. DREP and 0xcert are at the top of the pyramid in terms of funds raised in Q3 in the blockchain space. The technology behind bitcoin is believed by many to have the capability of disrupting global business processes.

Although in 2018 crypto prices have taken a hammering, the underlying belief in blockchain technology seems to be prospering.

Investment pick by top 10 crypto investment funds

A large number of investments have been made by DCG & Blockchain Capital, as focused blockchain funds went on a shopping spree in 2018.

Number of investments per fund (Source: InWara’s Database)

Key Takeaways:

Despite the high risk of investment in ICOs, the high percentage of fraudulent ICOs, and the fall in the prices of the tokens of many projects, there remains much to be anticipated in the cryptocurrency market.

The third quarter of 2018 was a slow period for ICOs compared to the first and second quarters. Nevertheless, the total amount of funds collected exceeded $2.4 billion. In this regard, the 20 largest ICOs accounted for more than 40% of this amount (around $1 billion).

On the bright side, 2018 has introduced crypto to more people around the world. There have been more coins, more ICOs, more money, and more industries involved in blockchain than ever before.

With new investment projects about to enter the market, as well as various countries around the world moving towards legitimatizing cryptocurrency, and talk of crypto taxes and regulations, it is fair to hope that further adoption may become ever closer. In addition to the increased availability of investment products, there are also strong fundamental news to look forward to later in 2018 and early in 2019.

For the full breakdown, see InWara’s Q3, 2018 report.

About & Methodology

The InWara Research Team ensures quality and accurate research, analyzed exhaustively by a team of quality controllers and highly skilled analysts. The research team strives to publish only the most accurate information possible, so all information has been carefully considered on a factual basis and the data is collected by analyzing 3000+ ICO whitepapers, almost 2200 official company blog articles, 500 official press releases and continuous web monitoring of news and social media sources.

Disclaimer: Originally posted on Coinmarketcap. This is not financial advice. Opinions, statements, estimates and projections in this message or other media are solely those of the individual author(s). They do not necessarily reflect the opinions of Inwara or any of its affiliates (“Inwara”). Inwara has no obligation to update, modify or amend this message or other media, or to otherwise notify a recipient thereof, in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Any content, information and any materials provided in this message or other media is on an “as is” basis. Inwara makes no warranty, expressed or implied, as to its accuracy, completeness or timeliness, or as to the results to be obtained by recipients, and shall not in any way be liable to any recipient for any inaccuracies, errors or omissions herein. Without limiting the foregoing, Inwara shall have no liability whatsoever to a recipient of any message or media, whether in contract, in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by such recipient as a result of or in connection with any actions, opinions, recommendations, forecasts, judgments, or any other conclusions, or any course of action determined, by it or any third party, whether or not based on the content, information or materials contained herein.**