At the end of 2017, when the euphoria on the digital currency market reached its apogee, many so-called industry experts predicted the dominance of Ethereum on CoinMarketCap and the end of the era of Bitcoin.
Developers and entrepreneurs launched thousands of new ICO-projects which raised millions of dollars and created a high demand for Ethereum.
It would seem that a radically new way of attracting investment, a viable and faster alternative to venture financing, has been created. At that time inspired traders and market participants preferred to avoid the discussions about the growing number of fraudulent schemes in the Ethereum ecosystem.
Nevertheless, in 2018, a rapid correction of the cryptocurrency market began, which has now officially reached the size of the “dot-com bubble”. Despite the fact that this has already happened in the past, the rupture of a new bubble has become the focus of attention of mainstream media, which, apparently, will continue to “savor” the new turns of the fall.
However, one should not forget about the existence of the following rule: the drawdown of altcoins, as well as their growth, is almost always stronger in comparison with indicators of Bitcoin. But even the most ardent maximalists and skeptics hardly expected that Ethereum would demonstrate such a steep dive, ignoring all levels of support drawn by technical analysts.
In retrospect, it becomes obvious that most ICO projects were doomed to failure for various reasons: from poor management and/or incompetence of the development team to the lack of demand for the proposed product.
Now, when the euphoria is not as brights as it was before, and the money is no longer pouring from the sky, many unlucky investors are beginning to understand, in fact, what they have invested in general, and are surprised to find that many projects did not need an internal token at all.
In the community, they actively joke about the growing collective claims against developers and blockchain startups, and most of the investors accuse them of selling unregistered securities, which is an extremely serious crime.
Most likely, many unlucky “contributors” did not even bother to read the White paper of projects, but simply distributed funds in equal parts or in some definite ratio between different ICOs, without really understanding or not paying attention to the difference between utility tokens and security tokens.
Nevertheless, many things are really clarified only in retrospect. Is it worth blaming people for wanting fast money? This is a philosophical question that can be discussed for hours. The truth is that in 2017, the world was shaken by a cryptocurrency fever, which sometimes struck common sense and pushed for rash actions in pursuit of new gold.
And this is not surprising that since at the beginning of the year, the US Securities and Exchange Commission (SEC) sent out dozens of agendas to companies and experts involved in the ICO industry, and its head called all tokens securities.
The possible confrontation with the SEC of all the issuers of utility tokens rather frightened the market, and the concept itself, which implied the fastest possible fundraising without any bureaucratic barriers and the need to register tokens anywhere, was threatened.
Jordan Borreso is convinced that the biggest disappointment for investors will be the fact that the architecture of projects with utility-tokens cannot be fundamentally useful for solving the problems they initially declared.
What was originally the reason for the impressive growth in the ETH price suddenly turned against the parent platform. The success of ICO turned Ethereum into a real cryptocurrency empire, the fall of which is difficult to imagine. Now the platform is paying for the sins of failed startups.
“Public ICOs are almost dead, and most of the existing ones will fall quickly because of the money that has ended and the product delivery fails,” Borreso added.