Cryptos were introduced to the public about three years ago and today the market is worth billions despite many governments and even individuals not being sure of the future of cryptocurrencies.
However, going by the numbers, cryptos seem to be doing well. They have in fact put a challenge in front of traditional banks as investors now appear to be using tokens to raise funds instead of turning to banks. In fact, according to reports, ICOs were 45% of the total IPOs raised in the second quarter of the year.
Since banks are not a part of this industry (yet) they appear to be losing customers to the crypto market that works on blockchain technology, which is said to be safer and faster than traditional methods used by banks.
According to reports released by Coindesk, the US IPO market raised about $16 billion in the second quarter of 2018, with $7.2 billion credited to ICOs.
There are several reasons why ICOs are such a success. They benefit everyone involved. The biggest benefit is for the issuer who can gains huge capitals without having to deal with the issues of traditional capital markets.
This is largely because the ICO market does not demand any covenants from the token issuer. Plus, ICOs can have a global reach, which allows issuers to generate huge amounts in lesser time.
In addition to this, ICOs benefit investors as well. They are able to purchase a product that they’d be able to sell tomorrow at a higher price. It’s a win-win for everyone involved.
A number of companies have used this method to raise capital. These include some known names like Telegram, and Eastman Kodak, and soon more companies are going to have their own tokens as well.