Autonomous Next published a report on January 21, 2019, which states that the blockchain industry saw $24 billion in funding in 2018, most of which came from unverified self-reported crowdfunding ventures.
Autonomous Next ’s report stated that in December 2018, there was an almost even split between the funds raised through traditional venture capital and those raised through ICOs.
The reported figures for the month of December are $490 million raised through ICOs and $310 million raised through venture capital funding.
(Source: Next Anonymous)
However, it is noted that the figures for ICOs cannot be verified as they are self-reported. It is believed that some of the figures reported for December were actually raised earlier in the year and, as a result, the word of the companies in question might not be accurate.
Moreover, the quality of the data available is, by Autonomous Next ’s admission, declining in quality and they predict that the $490 million figure is likely inflated.
Possible Figure Inflation and What it Means
To drive home their point regarding self-reporting, the research firm provided case studies from Jinbi and Bakkt.
Jinbi, for instance, self-reported $47 million raised for a gold-backed blockchain token. This figure, according to the report, cannot be verified while In the case of Bakkt, the $180 million they raised through venture capital is verified and well-documented.
The implications of potentially inflated figures become more apparent when the 2018 global funding figures are looked at. Out of the over $24 billion raised for blockchain and cryptocurrency firms, $5.2 billion came from venture capital while $19 billion came from ICOs.
In 2018, many firms raised significant amounts from ICOs and these figures were, of course, self-reported.
STOs of the Future
After reviewing the past year, the report touched on what can be expected from the future.
According to them, Security Token Offerings (STOs) have gained great momentum in the last few months and are promised to become the future of the industry for all investors.
However, it cannot be yet said whether STOs will save the sector. The report states that STOs could either be about repacking risky equity or “a share in some mall in Wyoming and plugging that into the equity crowdfunding theme.”
It was also mentioned that the industry needs to move away from chronic crowdfunding and focus more on building sustainable service structures that would necessitate the use of cryptocurrency as payments and become self-reliant.