Over $1.2 billion in Cryptocurrency was raised through Initial Coin Offerings (“ICOs”) in the first half of 2017, far outstripping venture capital investment into Blockchain and Bitcoin firms. Of that amount, approximately $600 million was raised in last 30 days alone.
Autonomous is pleased to announce the release of “Token Mania,” an in-depth look at Initial Coin Offerings: What they are, how they work, and the ways in which this new funding mechanism based on distributed-ledger technology stands to displace traditional markets for public and private investment.
This 78-page document addresses many of the controversial issues that have surrounded the ICO phenomenon, including similarities to the dotcom bubble, the impact of “Bitcoin whales,” the landscape of regulation, and other topics. The analysis includes key takeaways for startups, financials incumbents and investors. Key points include:
Table of Contents
Introduction to Initial Coin Offerings
- Descriptive definition of ICOs, their functions and how they differentiate from traditional investing methods
- Covers the purpose of tokens and their two primary values in today’s offerings: (1) utility and (2) speculation, as well as what would make a Token a security
- Discussion of how supply & demand dynamics, and associated limitations, shape market behavior and valuation run-ups
- Quantified and compared the funding received by all notable ICOs in 2017 1H
- Breakdown of the ICO funding by industry, with additional subcategories for finance representing markets, investments and payments/banking. Additional categories include gaming & gambling, media & social, cryptocurrency and core tech.
- Case studies of noteworthy token launches: Storj, Gnosis, The DAO, SONM and Status
Sources of Capital
- In-depth description of investors participating in ICOs, including a definition of the term “Bitcoin Whales” and the potentially ramifications that their actions can cause
- Overview of cryptocurrency market volatility and market capitalization for the largest cryptocurrencies
- Analysis and descriptions of the several possible sources of funds for “Bitcoin Whales”
- Case studies of firms specifically investing in Blockchain, including Blockchain Capital, Polychain Capital and Grayscale / Bitcoin Investment Trust
Strategic Context and Direction
- Analysis of the money supply and user base of popular virtual economies with insight into the economic activity and its implication for financial incumbents
- Comparison of the DotCom bubble and the Alt-coin bubble with reference to performance of DotCom survivors and changes in Marketcap of top 20 digital currencies
- Opportunities for Financial Services incumbents to incorporate ICOs into business models
- Leveraging ICO mentality to develop the community and technology
Regulatory and Governance Issues
- Overview of current legal and regulatory climate for ICOs with specific focus on Switzerland, Singapore, China, United Kingdom, Russia and the United States
- Analysis of project governance methods and legal developments of public decentralized software as a financial infrastructure
Investment Structure Considerations
- Discussion of the Cryptoeconomy from the persective of US investors and whether tokens are securities under the Howey test
- Case studies of disclosed legal structures used by the Bitcoin Investment Trust, CoinList, Blockchain Capital and Crypto Assets Fund
(List of 2014 - 2017 Initial Coin Offerings)
- A Securities Law Framework for Blockchain Tokens, Coinbase, Coin Center, Union Square Ventures and Consensys
- Framework for Securities Regulation of Cryptocurrencies, Peter Van Valkenburgh, Coin Center
- Realizing the Potential of Blockchain: A Multi-stakeholder Approach to the Stewardship of Blockchain and Cryptocurrencies, Don Tapscott and Alex Tapscott
- The Bitcoin Blockchain as Financial Market Infrastructure: A Consideration of Operational Risk, Angela Walch
- Analyzing Token Sale Models, Vitalik Buterin
- ICO Trackers: https://www.smithandcrown.com/icos/; https://www.coinschedule.com/; https://icotracker.net/; https://www.ico-list.com/
- Cryptocurrency data providers: https://coinmarketcap.com/; https://www.cryptocompare.com/; https://www.coingecko.com/
- ICO news providers: http://www.coindesk.com/; https://www.cryptocoinsnews.com/; https://cointelegraph.com/; https://bitcoinmagazine.com/
- Social media & forums: https://bitcointalk.org/; http://boards.4chan.org/biz/ (NSFW); https://www.reddit.com/r/ethereum/; https://www.reddit.com/r/Bitcoin/; https://www.reddit.com/r/icocrypto/
Engage with Autonomous
Financial service companies are transitioning from human driven revenue models to information technology driven revenue models. As part of our ongoing focus on this transition, and the core technology themes being expressed in finance, we have established Autonomous NEXT. The products and services are designed specifically for financial firms looking for strategic insight into the pace and path of the core themes shaping the financial services ecosystem.
Our services are suitable only for professional investors. You may purchase this analysis individually, or engage with us more deeply by contacting us here.