Reflecting on Crypto in Q1 2019 – Is the worst behind us?

A sustained winter in the Crypto space has left most involved subdued and with no outlet, however, Q1 2019 has shown promise. With larger coins holding price levels and the smaller alt-coins delivering big, it appears that a semblance of calm has struck Crypto markets in 2019. Interesting insights from the Crypto Landscape indicate a slowdown in ICOs, a massive jump in STOs, and skepticism from Institutional investors!

So what did this quarter hold for ICOs?

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ICO Landscape: ICOs take a body blow

The number of ICOs have crashed dramatically the world over. Despite the efforts of some countries to create a conducive legal environment for launching an ICO, the overall numbers back the ongoing sentiment of fear and mistrust towards the Initial Coin Offering. During Q1 of 2019, the number of ICOs fell by over 60% when compared to the last quarter of 2018.

Funds raised in token sales ($MM) country-wise

ICO Funding: A new leader emerges?

Companies from countries such as the UAE and Cayman Islands have leapfrogged the usual suspects like Uthe K and Singapore. It is interesting to note that UAE, Cayman, UK Canada & Singapore together account for over 70% of funds raised from token sales.

It is interesting to note, USA slipped down the funding ladder largely due to the strong regulatory stance taken by the SEC with countless class action suits against fraudulent ICOs.

Do we have an alternative for ICOs?

As ICOs took a body blow as a fundraising tool, a ‘new’ regulatory compliant token offering or as we know it the security token offering came up. The numbers confirm the sentiment around STOs with Q1 of 2019 showing a growth spurt of a whopping 130% vs the previous quarter.

# of STOs quarter-wise

Security Token Offering: The chosen alternative?

The evolution of the domain – Acquisitions breeding maturity?

The number of M&A deals in blockchain observed a slight dip this quarter but still closed strongly at 21 deals.

# of M&A deals, quarter-wise

M&A in Crypto: Who’s joining the blockchain bandwagon next?

Of the several marquee acquisitions that took place in the blockchain-crypto space in Q1 2019, some that are worth mentioning include Facebook acqui-hiring a majority of the employees of London based blockchain research company Chainspace. Coinbase acquiring Blockspring and Kraken’s 9 digit acquisition of Crypto Facilities.

Skepticism of Institutional Investors?

After the highs of Q3 2018, Institutional investments have seen a downward spiral in the next two quarters. During Q1 of 2019, only $500 million of private investments were made in blockchain-crypto companies the world over. This number pales in comparison to the $1.3 billion raised during the previous quarter & over $2.2 billion raised in Q3 2018. It must be said that institutions are playing it safe with the number of investments they make in blockchain in the current macro environment.

Private funding quarter-wise

Private Funding in Blockchain: Wary investors hold off during the winters

The unbelievable crash from the highs of Jan 2018 has ensured most tourists exited the blockchain ecosystem and only core projects remain and it is a sense of that which is observed from the dwindling ICO numbers and lower blockbuster private funding investments. With the additional ‘security’ in tokens gaining traction, it seems that a period of slow recovery is what the rest of 2019 has to offer.

By the Inwara team.

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