What is an ICO?
An ICO, or initial coin offering, is sort of like an initial public offering, but with a crypto twist and without the regulatory hoops to jump through, although this could be changing in a big way (more on that in a bit).
In the simplest terms, an ICO is a fundraising means in which a company attracts investors looking for the next big crypto score by releasing its own digital currency in exchange, typically, for bitcoin.
Here’s a calendar of upcoming ICOs:
You’ve probably never heard of most of these, but there have been a few ICOs in recent years you most certainly have read about by now.
Take ethereum, for example. Back in 2014, the ethereum ICO raised $18 million in bitcoin, or the equivalent of 40 cents per ether. After a huge spike, ethereum is now trading above $200 with a market cap of approaching $19 billion.
One ICO startup recently attracted more than $150 million in just three hours, and more than $1.3 billion reportedly has been raised overall so far this year. The number of ICO sales concluding each week has almost doubled from an average of 1.5 sales a week in 2016 to 2.75 sales a week for the first four months of 2017, according to Smith and Crown data.
The demand is there, but so are the risks.