The prolonged “crypto winter” combined with the numerous ICO exit scams were a significant body blow to the blockchain-crypto space. But 2019 shows promise, with that let’s look at some of the significant market trends.
ICO Landscape: ICOs take a deadly blow
Overall the number of ICOs have dropped dramatically the world over, despite the efforts of some countries to create a conducive environment for launching an ICO. During Q1 of 2019, the number of ICOs fell by 61% when compared to Q4 of 2018.
Funds raised ($MM) country-wise
In terms of funds raised companies from countries such as the UAE and Cayman Islands have leapfrogged ahead of the usual suspects like UK and Singapore. UAE and Cayman Island companies attracted $142 million and $100 million respectively and accounted for 21% and 15% of the total funds raised. The world over, companies were able to collectively raise a staggering $790 million in capital through ICOs.
STO landscape: UAE the leading player
In the wake of the downfall of ICOs as a fundraising tool, the need was dire for a regulatory compliant token offering or as we know it the security token offering. In retrospect, InWara had predicted that STOs will take off in 2019, owing to shift in perspective among investors and regulators.
The numbers confirm the prediction with STOs that were launched during Q1 of 2019 showing a growth of a whopping 130% increase over the previous quarter.
# of STOs quarter-wise
Quite interestingly, UAE has emerged as the market leader in terms of funds raised by STOs as well. UAE based companies raised a whopping $67 million in funds and accounted for as much as 56% of the total funds raised.
M&A activity: Established enterprises enter crypto
The number of M&A deals observed a slight dip this quarter at just 21 deals, as opposed to the 27 deals that were observed the previous quarter.
# of M&A deals, quarter-wise
Of the several acquisitions that took place in the blockchain-crypto space, some of them are of key significance. For example Facebook acqui-hiring a majority of the employees of London based blockchain research company Chainspace. This deal marks the official entry of the social media giant into the crypto space, although the company had earlier revealed it had plans of releasing its own stable coin on its WhatsApp messenger platform.
Cryptocurrency exchange Coinbase had made two deals, bumping up their total number of acquisitions to twelve.
Private Funding: Investors still wary
During Q1 of 2019, as much as $500 million of private investments were made in blockchain-crypto companies the world over. While this is no small feat, it pales in comparison to the $1.3 billion raised during the previous quarter.
Private funding in the blcokchain-crypto space has decreased by over 63% during Q1 2019.
Private funding quarter-wise
It becomes clear that investors are still reluctant to invest heavily in the blockchain-crypto when considering the fact that private funding has been depreciating since Q3 of 2018. Investors might be wary of financially backing new ICO projects, as in retrospect many of them turned out to be scams. So it is likely that investors will only back more credible projects that run a low risk of any fraudulent activity.