There are currently 2,069 cryptocurrencies listed on CoinMarketCap, most of which you have probably never heard of, and are more than likely doomed to go to zero before this bear market is over.
This is a common viewpoint among many people in the crypto industry including Barry Silbert, the founder and CEO of Digital Currency Group and Grayscale Investments, as well as one of IIB’s top 10 blockchain experts you should be following on Twitter.
In a recent phone interview with CNBC, Silbert said:
“I’m not a believer in the vast majority of digital tokens and I believe most will go to zero. Almost every [initial coin offering] ICO was just an attempt to raise money but there was no use for the underlying token. The vast majority of what’s out there will be eliminated.”
The ICO Boom of 2017-2018
The rise of initial coin offerings helped propel the cryptocurrency market to a staggering $800 billion by the beginning of 2018. ICOs were a highly popular way for companies or projects with literally nothing but a website and an idea to raise 10s of thousands if not millions of dollars.
The retail investor buying mania was at its peak in late 2017 and the beginning of 2018, which made retail investors easy targets for poor or outright fraudulent ICOs.
However, as the price of Bitcoin started to crash so did all the alternative cryptocurrencies (altcoins) from ICO projects. The US Securities and Exchange Commission (SEC) cracked down on projects that failed to follow securities laws, and over 1,000 crypto projects died in 2018 as a result.
Moreover, data from CoinSchedules show that ICOs have lost momentum in a big way as ICO valuations are down to levels not seen since the very beginning of 2017. In January 2019, $291.6 million was raised through ICOs, which is around 19 times less than the $5.8 billion raised in June of last year.
Bitcoin Is Still King
While Silbert is bearish on ICO tokens, he is more bullish on Bitcoin than ever, now that the king is at an 80% discount from its all-time high of near $20,000. As an early investor, Silbert has lived through multiple price plunges in Bitcoin’s short 10-year existence, and this is its 3rd plunge of 80% or more.
According to Silbert, there is a high degree of interest in Bitcoin from institutional investors, and he believes the asset has the potential to replace gold as a safe haven asset.
“As far as I’m concerned bitcoin has won the race to be digital gold.”
Sharing this thought is Mike Novogratz, founder of the crypto merchant bank Galaxy Digital, who recently said Bitcoin is going to be digital gold in an interview with Bloomberg TV.
Do you agree that most ICO tokens are going to zero? Is Bitcoin still the king, and will institutional investors be investing soon? Let us know what you think in the comment section below.