ICOs plummet as China’s share of funding rises: report

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Initial coin offerings (ICOs) took a huge beating in 2019, a new report by market research firm CB Insights has revealed. ICOs raised just over $370 million last year, down from over $7.8 billion in 2018. Venture capital funding in the digital currencies and blockchain industry raised over seven times more, but also went down 40% year-over-year.

The report disclosed that the ICO boom has slowed down drastically, raising just $371 million in 2019. In the previous year, the industry had attracted $7.1 billion. The majority of this was raised by two companies; EOS with the record-setting $4 billion ICO and the very controversial Telegram ICO which brought in $1.7 billion. In 2019, a lot changed, starting with regulators’ keen eye on the industry – all contributing to a decline in the funds raised through ICOs.

Venture capital firms are still as active in the industry, with 807 deals signed last year. This is down slightly from the 822 deals signed the previous year. The total amount raised from VC deals was, however, down over 30% to $2.79 billion from $4.26 billion the year prior. Nevertheless, the amount is over 200% up from the $1.25 billion raised in 2017, with the number of deals almost triple the 297 signed then.

The report also revealed the digital currency industry’s rising independence from the mainstream VC industry, with the number of deals signed by industry VC firms rivaling the more established firms. Coinbase Ventures and NEO Global Capital were recognized as some of the most active VC firms in 2019.

“Deals are moving from West to East,” the report indicated, referring to the growing erosion of investment in the United States. In 2015, the U.S. received 51% of all the deals signed in the digital currency space, with China registering a mere 2%. This has changed in the past four years, with the U.S. now accounting for 31% while China’s share has grown to 22%.  The two have been dominant for a while now, but other blockchain hubs such as South Korea, the U.K. and Singapore have also been rising.