The rise of ICO companies has surprised many people in tech trade. But it helped the blockchain companies to raise $4 billion in 2017 and this is expected to continue in 2018. Beyond this momentum for ICOs, also popularly known as token sales, the leading ICO companies are already eager to start investing.
The rise of ICO companies has surprised many people in tech trade. But it helped the blockchain companies to raise $4 billion in 2017 and this is expected to continue in 2018. Beyond this momentum for ICOs, also popularly known as token sales, the leading ICO companies are already eager to start investing. TechCrunch knows too well that a minimum of half a dozen of the companies that were able to raise the money through ICOs and each one of them has at least $500 million in total coin market cap have plans to invest in a number of blockchain projects through seed-or-early-stage style deals.
According to some sources, the very first ICO-powered finances will be expected to come online in the first quarter of 2018. It is also expected that the trend might spread even beyond the early movers, which is likely to catch the attention of others for different reasons. Most of the large capitalized ICO companies are already busy developing ambitious platforms. Due to the nature of being a platform, it will require more companies to build on or with their own product. Similar cases are witnessed with VC-based companies, which invest in up-and-coming business startups that compliment their platform. This is definitely a good strategy to build an ecosystem.
A similar move has been used by other giant tech companies including Slack that used its own fund. This type of investment vehicle is widely used to create good relationships with startups, which helps to add new features, integration and different other functions to the Slack service. The same method is now used by many ICO companies who are now developing platforms that are focused on verticals and these include distributed computing, payments, logistics and social media. This way the capital is deployed strategically to build an ecosystem to bring the platform to life.
However, many of these ICO projects are still under development and they’re likely to emerge later in the year with lots of focus being to bring on board more partners. Finally, the most important component is the money itself. With the sharp rise in crypto prices, definitely, there is plenty of capital that could be put to use in this way. So far, more than 20 coins that were created via ICOs are now estimated to have a market cap of over $1 billion, and that is according to Coinmarketcap.com. The significant appreciation in the cryptocurrency industry has seen Ethereum, a platform used for Ether cryptocurrency which is used as a base for tokens traded in ICOs, appreciated in value to hit $1000 from below $500 in the month of November. This allows the companies to have funds they need for product development and the potential to do much more.
The critical question is how these funds are invested when they arrive, whether it’s investing in other types of cryptocurrencies or equity-based deals.