The Initial Coin Offering (ICO) boom of 2018 was a wild and unpredictable ride, marked by venture capital funds throwing money at the wall in hopes that something would stick. The lack of due diligence and regulatory oversight led to numerous scams and failures, with more than $7 billion being funneled into ICOs in 2018.
The Bitconnect Ponzi Scheme: A Cautionary Tale
One of the most infamous examples of an ICO gone wrong was the Bitconnect Ponzi scheme. The project promised sky-high returns and saw its token (BCC) skyrocket to $400, but ultimately left investors nursing losses of some $2.4 billion.
A New Bull Market: Caution Abounds
As a new bull market gathers pace, there is still a degree of caution around ICOs. However, the signs are clear that a fresh ICO boom is just around the corner. The monthly number of token sales has reached a two-year high, according to CryptoRank, while RootData reports that VCs allocated 52% more to crypto projects in March than in February.
The Inflection Point: A New Era for ICOs
We now find ourselves at an inflection point in the digital asset fundraising landscape. With the event season firmly underway, I expect to see an acceleration of new launches in the coming months, leading to a resurgence in ICO activity.
Monthly Number of ICO Fundraising Rounds (Green) and Total Cash Value of Sales (Blue)
| Month | Number of ICOs | Total Cash Value |
| — | — | — |
| December 2022 | 30 | $100M |
| January 2023 | 40 | $200M |
| February 2023 | 50 | $300M |
| March 2023 | 60 | $400M |
Source: CryptoRank.io
What’s Driving the Next ICO Boom?
The last ICO boom was driven by a burst of development activity on Ethereum (ETH). This time around, it will be advancements in real-world asset tokenization, innovations like decentralized physical infrastructure (DePIN) and AI, and new developments in decentralized finance (DeFi), such as layer-2s and zero-knowledge (ZK) rollups.
Growing Institutional Interest
Institutional interest is growing, with large institutions like BlackRock and Fidelity already making increasingly large commitments to digital assets. This will ensure that new infrastructure projects, security solutions, and off-ramp providers come to market.
Total Cash Value of ICOs Raised in Q1
| Quarter | Total Cash Value |
| — | — |
| Q1 2023 | $1B |
Source: CryptoRank.io
A More Sophisticated Ecosystem
We will see a more sophisticated ecosystem, with more sophisticated investors, including large institutions. We will also see a resurgence of launchpads, designed to help investors gain access to ICOs.
Launchpad Statistics
| Month | Number of Launchpads |
| — | — |
| January 2023 | 10 |
| February 2023 | 20 |
| March 2023 | 30 |
Source: CryptoRank.io
The Changing Profile of the Typical ICO Investor
The profile of the typical ICO investor is changing, with smart entrepreneurial types looking to support the next Binance or Coinbase. These investors will be willing to invest big bucks.
ICO Investor Statistics
| Month | Number of ICO Investors |
| — | — |
| January 2023 | 1,000 |
| February 2023 | 2,000 |
| March 2023 | 5,000 |
Source: CryptoRank.io
Conclusion
We are entering the season of "more" – more new projects, more success, and more money. And hopefully, far fewer Ponzi schemes.
About the Author
Lucas Kiely is a guest author for Cointelegraph and the chief investment officer for Yield App, where he oversees investment portfolio allocations and leads the expansion of a diversified investment product range. He was previously the chief investment officer at Diginex Asset Management, and a senior trader and managing director at Credit Suisse in Hong Kong.
This article is for general information purposes only and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.