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November ICO Funding Levels are Worrisome for DApp Platforms like Ethereum and Stellar

Nov 27, 2018


  • The cryptocurrency sell-off that began on November 15th, 2018 is having a substantial impact across all aspects of the general cryptocurrency industry. Among the most affected are altcoins, specifically those who host a platform for decentralized applications (DApps) and rely on Initial Coin Offering (ICO) funding to drive activity and volume on their platform and in their underlying coin.
  • The two largest DApp platforms that rely on this activity are Ethereum (ETH) and Stellar (XLM), the 3rd and 5th largest cryptocurrencies by market capitalization. Month-to-date, ETH is down 45.11% while XLM is down 35.11%.  
  • Since peaking at USD$1.66bn in the month of December 2017, ICO funding levels have consistently fallen on a month-to-month basis, with the exception of May and June 2018.
  • October 2018’s ICO funding level of USD$145.4mm is the lowest monthly funding ICOs have received since April 2017, prior to the mainstream popularity of ICOs.  
  • With only 4 days left in the month, ICOs have received a measly USD$76.6mm of funding since the start of November. Unless ICOs receive an unexpected inflow of capital, November 2018 will be the worst month for ICO funding since February 2018, when ICOs only received USD$14.0mm of capital. 
  • ICO funding levels in 2018 may indicate that investors are losing interest and confidence in ICOs. The continuation of this trend may prove detrimental to DApp platforms like Ethereum and Stellar. Lagging ICO funding levels may also be serving as a catalyst helping to drive the broader cryptocurrency sell-off, in addition to other factors.
  • As ICO funding continues to trend lower, DApp platforms like Ethereum and Stellar should begin focusing on building out their active user base. No longer will activity on these platforms be generated from astronomical levels of ICO funding driven by retail investors hoping to “get rich quick”. As financial watchdogs like the US Securities and Exchange Commission continue to increase regulatory oversight for the new fundraising method, this trend will only continue. Instead of relying on ICO fundraising activity, DApp platforms should focus on functionality and usability of DApps on their platforms while marketing their platform as practical for everyday use in order to build out an active user base.

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