Today, PwC Strategy and the Swiss Crypto Valley Association released their 5th Global ICO/STO report, timed to coincide with the second annual Crypto Valley Conference taking place in Zug, Switzerland.
The report offers strategic insights into the state of the cryptocurrency markets leading up to June 2019, the emergence of the initial exchange offering (IEO) as a means of funding, underlying infrastructure trends, and the progressing regulatory framework.
5th Global ICO/STO Report Summary
The report attributes the 2019 growth of the global cryptocurrency market cap to progressive clarification of the regulatory landscape, along with renewed interest in cryptocurrencies by institutional investors and established corporations. Although the report doesn’t allude to the Facebook crypto project specifically, the “Libra effect” is being widely debated elsewhere.
Insights into 2019 Token Offerings
From January to May 2019, there were 250 token offerings, which raised a collective $3.3 billion, compared with full-year 2018 in which 1,132 token offerings raised over $19.5 billion. It should come as no surprise that the numbers are lower this year, given the extent of the crypto winter.
The biggest token offering in 2019 was Bitfinex, which raised $1 billion, putting it in third place after EOS and Telegram as one of the biggest-ever token offerings. The Bitfinex token offering also accounts for the vast majority of funds raised through an IEO.
In contrast, the biggest security token offering (STO) of the year so far was BoltonCoin, which raised $68m. Despite the disparity between these two values, the ICO/STO report states that it expects further growth in the STO space as the year progresses, assuming strengthening regulation and support from larger, regulated exchanges.
The emergence of the IEO is one of the key themes of the report, which credits the new funding tool with multiple benefits. These include easier KYC for investors, more visibility and clients for exchanges, better and consistent regulation, and an easier process for startups as they can outsource the funding process.
Themes in the Crypto Finance Ecosystem
The recommendations of the Financial Action Task Force (FATF) are highlighted as a critical theme going into the remainder of 2019. The FATF issued a report last week in which it recommended that exchanges must share customer data, starting within the next twelve months. The G20 group of nations has indicated that it will comply with this, so now each country must come up with a means of implementing this.
Elsewhere, cybersecurity and custody solutions continue to feature as key themes in the cryptocurrency finance area, given the continuing plague of exchange hacks in 2019 which has affected Binance and Cryptopia, among others.
The report comes out on the third and final day of the second Swiss Crypto Valley Conference. Daniel Haudenschild, President of the Crypto Valley Association Board, spoke to Crypto Briefing about the recent developments in the blockchain and cryptocurrency ecosystem stating:
“Bitcoin holders know the January correction cycle. What we have seen is that over the prolonged bear market of BTC price, Bitcoin has reestablished itself as the king of crypto currencies. Alt coins seem to have suffered the most from this effect.
Now, as we see the market upturn we see some major business enter in the space, and we have to remember that these are not reactions, rather long-term decisions becoming public. Facebook, Bitrex, and other financial institutions and corporates have been working in stealth mode since before the boom in 17/18, and are starting to make their moves public.
Overall this is a great leap forward for public adoption of blockchain.”