Well, there doesn't seem to be another way to say it -- ICO activity is absolutely and unequivocally slowing down. We were optimistic that token offerings were independent of crypto currency prices -- in part because early stage technology venture activity should be separate from late stage market dynamics. But it was only a matter of time before the slowdown in crypto prices was reflected in a slow down of ICO funding and crypto fund formation. In fact, offerings as a function of crypto market cap, and especially as part of Ethereum's market cap, seem to be fairly stable as a percentage.
The numbers: if we look at all token offerings above $1 million in funds raised, 2017 saw $6.6 billion and 2018 YTD has seen $9.1 billion. So far so good, right! But, if we pull Telegram and EOS out of both numbers, we land at $5.9 billion 2017 YE and $4.1 billion for 2018 YTD. That's still a higher pace than last year, so let's drill down into the monthly figures. In particular, if we pull out Telegram ($1.8 billion) and EOS ($4.1 billion) on a monthly basis, the monthly trend look severely down -- to $560 million from a high of $1.5 billion in December 2017. So unless you believe in the continued presence of mega deals, token offerings have indeed been dragging due to continued regulatory uncertainty, tax overhang, and a lack of tangible progress in software adoption by the mainstream consumer.
That said, the uncertainty will get resolved. Even if Western regulators constrict the space into a narrow box, there are many legitimate jurisdictions that want to be crypto Delaware. Look at Japan: from Rakuten tokenizing $9 billion of loyalty points, to Mitsubishi bank talking about launching a cryptocurrency. Fear is worse than truth. And, we may indeed be entering the era of mega deals. Many of last year's token projects were built by new teams, like Seed stage venture. This year, more mid-stage companies (e.g., 50-250 employees) are tokenizing some asset of their existing operations. And next year, we may start seeing late stage companies bringing their own DLT projects to the market, and marrying them with public crypto. Just look at the Internet wave: March 2000 was the peak value share a percentage of market capitalizations. Despite the crash, the web has never been more present or important than today. Will crypto follow the same hype cycle curve?