Instead of ICOs being the latest craze to hit 2019, many people within the “blockchain industry” anticipate that they will be replaced with STOs, also known as Security Token Offerings. But with Bitcoin and Ethereum suffering coupled with the lack of liquidity in the market, is the STO hype overblown?
The role that ICOs played in the most recent bull run shouldn’t be underestimated. As people raked in the profits from practically every single cryptocurrency pumping, average Joes suddenly had spare capital. Rather than cashing out, this was reinvested into the system through risky ICOs, which further enhanced the bubble. This vicious circle soon came to a stop, though.
Since then, the whole market has suffered, and ICOs have been some of the worst hit. Many were released without a single line of code being written but with promises of life-changing technology. Despite raising excessive amounts of money, many have never released a product and are dead in the water.
With their failure and with many noobs getting rekt, where STOs will get their investments appears cloudy. Institutional investors could be a possible avenue, but they would be a lot more suspicious of any new project, especially in such a volatile market.
Why then is there still such hype from people surrounding STOs? Could it be that they themselves are attached to companies hoping to soon run one? That is definitely one possibility. Many “blockchain experts” pride themselves on their ability to market ICOs and STOs for new cryptocurrencies.
The other possibility is that people are underestimating the market sentiment and believing it could turn around any second now. Unfortunately, the way the market is shaping up, this bear market looks to be extending for quite a while longer.
Like that itch that just doesn’t seem to go away, STOs may rise like ICOs did. The only medicine to hold them off would be further bear market misery, but whether that is an evil people will like is unlikely.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.