Large investors want for new sales of coins or tokens (ICO) to have proceeded under existing regulatory rules. It is evident that regarding the ICO, it is mostly an investment in a company from which the investor expects profitable business, the growth of the client base, the related sales growth, simply expansion!
New investment world
With the new investment way known as ICO, the investment world was opened to everyone, without the need to demonstrate investing experience and sufficient funds. ICO projects have provided own tokens to investors and get funding primarily in major cryptocurrencies or fiat. Projects have thus easily managed to obtain funding from users who have seen the future in the project.
Over the past two years, it has been shown that interest in investing through ICO is enormous. Well, it's no surprise that people prefer investing in their favorite service or project that they use, especially in today's world with almost zero interest rate on savings accounts. It is estimated that in 2017, $6 billion has been invested through ICO, that's a considerable amount. If we compare this number with the capitalization of other assets, it's still just a drop in the ocean.
Till these days, companies tried to get funding via listing their shares on the stock market, so-called IPO. This situation was in force until 2017, when a turn was made, and more companies used ICO than IPO. Why? Issuing an IPO is costly, it's appropriate for a big company. You need to prepare a lot of documents, pay many lawyers, spend a lot of time on the whole process and so on. Contrary to this, organizing ICO is a piece of cake.
How do we call them? ICO vs. STO
It is true that the value of many tokens that projects have been issued through ICO has dropped to a fraction of the original value. Many people are disappointed and leaving the crypto space (temporarily) because they have lost money. The main problem was due to the inability of a given team to realize their vision or because of a fraudulent intention to raise money from trustworthy investors. There are some cryptocurrencies on the market, around which large communities operate, and development is underway. Such projects have grown to more than tenfold or hundredfold, and still growing, employing more and more developers, attracting the great brains of the world, and future generations, they are successors of today's largest companies such as Facebook, Google, Microsoft. One thing is essential - these projects would not have arisen if there were no cryptocurrencies that acted as an intermediary. ICO is now associated with a negative context, many people have chosen bad projects to invest. The whole transformation is the effort to cleanse the industry, to blame old practices and to start a new global expansion (this time under regulations and with the biggest investors) called STO.
Investing restrictions in the US - it is a known rule that only those who meet certain conditions can participate in the investment in start-ups. These are companies with a good accounting history or individuals who meet specific requirements, including the required income of at least $200 000 per year, $1 million of capital (the price of real estate not included). Here I will paraphrase the former Czech Prime Minister: "Who can afford it?" Because today the market is only oriented to the rich, other investors are de facto cut off from the opportunity to engage in investing in promising, emerging companies - startups. Just a few percents of the population can participate in this investing.
Current state
Till now, there are only a few projects around the world that deal with security tokens. On 11.7. Gibraltar Regulator GFSC received an application from the GSX (Gibraltar Stock Exchange) to extend the listing option and trading license for new security tokens. Once the application is approved, tokenization of other stock exchanges will soon follow. The first significant Security Token Offering (STO) in December 2017 offered a Tokenisation of markets (tZero) project, with $100 million raised during the day. Most security tokens offer a particular form of a dividend; investors gain share in company activities that are regularly paid to token owners.
Security Token Offering (STO). Tokens are a digital tradable asset the value of which is linked to shares in companies or land holdings. Security tokens are basically a tokenized version of existing assets. Thanks to tokenization, these assets are more accessible, more convenient and cheaper to trade. Blockchain provides transparency and easily convertibility, which are the features that every investor requires. Security Tokens can be seen as an innovative way for companies to get new funding opportunities, with investors gaining more transparency in investment at lower administrative costs. Tokenization has just begun the trend that will dominate global financial markets in the years to come, leading to the development of investment and a new wave of liquidity.
The estimated value of tokenized assets is $1-10 trillion by the end of 2020
It is now sure that the whole world will be tokenized, over the coming years, most assets will be expressed and traded in digital form. This will extend the well-known shared economy and lead to the expansion of shared investment, which is very transparent thanks to Blockchain technology. With this tokenization coming liquidity and where there is liquidity, there is an opportunity for profits.
How to achieve profits?
Imagine new words as brands with a limited amount. The entire world uses domains; the most popular is .com. You cannot register google.com twice. Whoever came earlier and paid the minimum registration fee is the owner. A few years ago, you could register a .com domain containing the word Bitcoin, and today they are all reserved, and the price is tens of thousands of dollars. We've bought the most lucrative domains with world names that will be very popular over the years and will soon become mainstream. Portfolios are still being creating. Some domains from the portfolios will sell, others will be used for new projects. We are trying to be one step ahead, and we use the fact that we have information from the crypto space that a regular domain trader can envy us. But that's not all. We are working on a project that will allow everyone to invest in domains quickly, safely, transparently and at low cost.
