The biggest bitcoin and ether offerings were Tezos with $232 million and Bancor with $150 million
The amount raised for initial coin offerings of cryptocurrencies has surpassed earliest-stage venture capital so far in 2017—a ranking change that institutional investors would be smart to acknowledge, Goldman Sachs said in a note out Tuesday.
“Real dollars are at work here and warrant watching, especially in light of the growing world of ICOs and fundraising that now exceeds internet angel and seed investing,” the analysts, led by Robert Boroujerdi, said.
The total amount of crypto ICO cash raised in the year to date amounts to $1.25 billion, more than venture funding at the angel and seed stages, though excluding crowdfunding (see the chart below), the Goldman note said, quoting Coin Schedule. An ICO, similar to an initial public offering of stock, is a fundraising process through sales of tokens linked to existing cryptocurrencies.
The biggest offerings were blockchains Tezos with $232 million and Bancor with $150 million in bitcoin BTCUSD, -3.03% and its rival, Ethereum’s ether.
Certainly, the $120 billion cryptocurrency market, with bitcoin at its helm, is not without scrutiny by authorities. Venture-backer The DAO, which was formed to invest in start-ups and projects linked to cypto platform Etherium’s ether, was shuttered following scrutiny by the Securities and Exchange Commission over its coin offerings earlier this year. The regulator said in July that ICOs should be considered as securities and fall under SEC oversight.
Yet regulatory formalization is not necessarily slowing all market expansion. Last month, LedgerX, a bitcoin options exchange, received regulatory approval from the Commodity Futures Trading Commission.