Bitcoin bull Brian Kelly has spoken out and said that initial coin offerings (ICOs) are becoming overvalued with traders taking a more considered approach to their investments.
Wait and See Game
Kelly, the founder and CEO of BKCM LLC, an investment firm focused on digital currencies, was speaking on CNBC’s Fast Money yesterday when he made his comments.
In his opinion, investors are in a “wait-and-see mode.” Kelly went on to say:
People are starting to say, ‘I’m going to put the brakes on the ICOs right now. I’ve got my portfolio. I don’t need a seventh or eighth ICO.’ To me, [ICOs are] not as hot as they used to be.
According to CoinSchedule, in the first six months of 2018, 469 ICOs have been launched. Since the start of the year, over $10.5 billion has been raised. This is compared to nearly $4 billion raised in 2017. So far, March has seen the most brought in, with more than $3.8 billion raised. The month with the most initial coin offerings was May, with 126.
Recently Rapper Akon announced that he was launching his own cryptocurrency. Called the “Akoin,” it will be used in the “Akon Crypto City,” which will be located in the West African city of Senegal.
Concern over ICOs
Of course, with the launch of new ICOs comes the risk with them. The U.S. Securities and Exchange Commission (SEC) is one such agency that has voiced its concern regarding them.
As a result, the SEC launched a fake website – HoweyCoins.com – in May to educate investors on the risks that initial coin offerings present. The SEC has also argued in the past that many ICOs are securities offerings in disguise. As a result, it is of the opinion that they could be putting investors’ money at risk.
Thailand is also stepping up its efforts and is expected to issue regulations on the market at the end of June.
Concern over the market remains, and understandably so. In April, it was reported that a Vietnamese crypto company pulled an exit scam, which saw it running off with $660 million in ICO earnings. As it’s an unregulated market, there is no way for the investors to get their money back.
Yet, while some offers may seem too good to be true, that doesn’t appear to be deterring investors from putting their money into them. However, as Kelly notes, the time may have come when investors are taking a step back. It’s no longer a case of investing in everything but seeing what you already have and going from there.
Do you think ICOs are overvalued? Let us know in the comments below.
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