Cryptocurrency investors are continuing to get hammered with unsettling news. Bitcoin is currently trading at just $3,449.32, down about 80 percent from its high last year, according to Forbes. As the coin continues its downward spiral, crypto whale Mike Novogratz told Bloomberg that the initial coin offering market is “dead.”
“The ICO market is pretty much dead right now,” said Novogratz during the interview. “There was a lot of fraud, and there was a lot of hype, and people lost money.”
One of the main reasons behind the fall of the ICO is an increase in regulations from groups like the Securities and Exchange Commission (SEC). Coin Desk reports that the organization has been categorizing ICOs as just another form of securities, leaving only Bitcoin and Ethereum classified as commodities. The SEC is still fearful that without adequate protections, investors are susceptible to being swindled.
“Companies and individuals are increasingly considering initial coin offerings (ICOs) as a way to raise capital or participate in investment opportunities,” wrote the SEC earlier this year. “While these digital assets and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets.”
Despite the uncertainty in the crypto market, some are still holding out hope. Telecommunications giant IBM announced via a blog post that the company is partnering with Hello Tractor — “a mobile platform that enables farmers to access tractor services on demand,” to bring blockchain technology to African farmers. The new system will also be supported by artificial intelligence which the company developed in Kenya.
“The magic behind the idea is what we call an agriculture digital wallet, a blockchain-enabled and AI-based decision support platform that enables capturing, tracking, and instant sharing of data, while creating end-to-end trust and transparency for all the parties involved across the agribusiness value chain.”
Novogratz isn’t giving up hope on cryptocurrencies, despite his opinions about ICOs. He stated during the interview he believes the coins will play an increasingly important role in the future. As more and more of our lives move digital, it makes sense that currencies like Bitcoin and Ethereum will only gain in popularity.
“We’ve invested in a company called High Fidelity, which is a virtual world,” he said. “Me and you, we’ll sit down, and we’ll have virtual beers. People think I’m crazy when I say that, but Second Life does $500 million a year of GDP, real money traded back and forth in a virtual world with old technology. That’ll be the first use case where blockchain really works.”