You know what’s cool? A billion dollars.
Blockchain technology has entered into mainstream consciousness with the growing resurgence of Bitcoin and the explosion of the ICO space. For years, the corporate world has toyed with ways the blockchain could be used to improve their backend services, but major financial investors largely shied away from the tech. As the $100 million dollar ICO has become increasingly common in 2017, it is fair to ask the question: Who will host the first billion dollar ICO?
Though fintech start ups have received funding to the tune of $1.8 Billion dollars over the past six years, most of these companies have been financed by the same handful of blockchain-friendly VC’s. This changed at the dawn of the ICO, which brought massive growth to the space by opening funding to the global community. As of this writing, companies hosting ICO’s have raised an estimated 1.4 Billion dollars in 2017 alone. This represents more than 600% year-over-year growth for the industry, and gives blockchain companies 6% of the total $23 billion dollar North American IPO space. We are half way through the year, yet there is little sign that the flow of ICO / ITO investments will be slowing down any time soon.
We have now had at least three $100 million dollar+ ICO’s. Bancor, a token reserve and exchange protocol, was the ICO to beat after raising $150 million dollars in under three hours. To everyones shock, this record was not held for long. Bancor was quickly usurped by EOS, a decentralized application platform, less than a month later. Eos successfully raised nearly $200 million dollars in a sale lasting only 5 days. Merely days after this historic crowd sale, the record was beat once again by Tezos. At $250 million dollars, digital commonwealth Tezos currently maintains the ICO record. How long will this remain the case? Several projects, such as prediction market Gnosis, have already raised lower amounts at $300 million+ valuations, by opting for a multi-round fundraise.
At the current rate of acceleration, the first billion dollar ICO is only months away; likely to occur sometime in the first half of 2018. One company is already seeking to claim the title of ICO unicorn, and likely has the guidance to succeed. John Mack, the former CEO of Morgan Stanley, has announced his intention to raise $950 million dollars via ICO for the project, Omega One. The problem that Omega One is attempting to solve is the crisis of liquidity on crypto exchange markets. How do you buy or sell large volumes of Ether and other currencies without moving the entire market? If their project successfully solves this issue, it could very well merit them the title of first billion dollar ICO.
End of the beginning
Token sales bring together the best of both the crowdfunding and IPO worlds. They solve a clear set of problems while bringing investment opportunity to projects across the globe, and are likely here to stay. Though some cautious analysts claim that ICO’s are a fad, only time will reveal whether this is true. With more than 70 remaining ICO’s planned for 2017, we appear to be at only the beginning of a new revolution-inside-a-revolution. If token sales are indeed a bubble, then they are likely still in the awareness phase. Once we reach peak mania, a billion dollar fundraise may be considered a common occurrence – just as multi-million dollar sales have become common today.