Overview

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. 

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Key Findings 

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  • 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

Autonomous NEXT framework for understanding digitization

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
 

Segmentation of Initial Coin Offering (ICO) market by industry (2014-2017 1H)

ICO Market

  • 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 cryptocurrency ecosystem and potential Bitcoin Whales

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

The Dotcom bubble teaches a valuable lesson – most new ventures die, but survivors become winners that take all

  • 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
 
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Investment Structure Considerations

Example of structure: The $400 million Bitcoin Investment Trust

Example of structure: The $400 million Bitcoin Investment Trust

  • 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
 
 

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.

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