A recent study conducted by Pricewaterhouse Coopers (PWC) in association with Crypto Valley to get a strategic insight into Initial Coin Offering(ICOs) and Security Token Offering (STOs). The result of the research suggests that both ICOs and STOs are not fundamentally different. The report also estimates that the combined capital raised by ICOs and STOs in 2018 touched $20 billion.
The report also suggests that the capital generated through these fundraising techniques have tripled over the years. 2018 saw the conduction of around 1132 ICOs and STOs which is more than double the amount of 552 such offerings in 2017.
The amount generated by these ICOs and STOs combined tripled in 2018 when compared to the amount generated in the previous year. A big chunk of this amount was contributed by two ICOs, EOS raising around $4.1 billion, while Telegram raising around $1.7 billion. These two ICOs combined contributed 29% to the total capital raised in 2018.
However, it is interesting to note that despite such a huge capital generation, the number of offerings declined sharply in the second half of 2018, mainly due to the bearish trends being at its peak during the said phase.
STOs Have Become a Great Alternative to Traditional Fundraising
In its final report, PWC has noted that STOs are not fundamentally different from the ICOs and its just a more mature and well-regulated form of fundraising. STOs have taken quite a lot of feathers from the ICOs, like low entry barriers for investors and traditional venture capital [and] private equity fundraising characteristics.
The reports note that the trading and exchange infrastructure needs to keep up the pace to facilitate the growing demand for STOs. The report says that STOs despite its fundamental resemblance to ICOs could become the most popular form of fundraising in coming times.
The increasing trend of STOs over ICOs are quite evident from the stats over the years. in 2017 only two STOs were conducted raising a total capital of $22 million, while the number jumped to 28 in 2018, raising a total of $442 million.
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