According to the analytical company TokenInsight, the hype around initial public offerings (IEO) is fading.
TokenInsight researchers evaluated the amounts collected on the IEO and came to the conclusion that the boom lasted only 3 months and is now experiencing a gradual fading. The company relied on data from the CoinSchedule portal, according to which in April IEO raised $153 million, and in May already $1.2 billion. In June, the amount of funds collected fell by 88% compared to the previous month and amounted to only $125 million.
The authors of the report suggest that the sharp rise in the popularity of IEO may be due to the growth of bitcoin, the price of which only in May increased from $5,000 to $9,000. Subsequently, the rate of the first cryptocurrency continued to grow, but at the same time, the amount of cash receipts in the IEO sharply decreased.
Some projects were able to rise on the wave of popularity of IEO, which is still not even close to the hype around the ICO in late 2017-early 2018, but many startups did not meet their expectations. For example, the BitPanda exchange held an IEO for the token of its new crypto-fiat platform. Investors were counting on high trading activity, thanks to which the token will be able to repeat the success of Binance Coin or Huobi Token, but the trading volume on the site rarely exceeds $3 million per day.
Analysts drew attention to the fact that the inflating of the IEO bubble was started by the Binance exchange, which this year relaunched Launchpad – its platform for IEO, opened at the end of 2017. Other trading platforms, inspired by the success of Binance, also began to organize the IEO, but not with such overwhelming success