Are Initial Coin Offerings (ICOs) Fads, or the Future?

CNBC / Jeff Stewart: Designed to capitalize on what the pair describe as the coming decentralization of capital markets, the Global Public Offering Fund plans to use an initial coin offering (ICO) to raise capital to invest.

“Long term, ICOs are the future of the capital markets,” [Jeff Stewart] told CNBC, pointing to that increasingly popular process in which start-ups bring in millions of dollars by issuing blockchain-supported virtual tokens to investors in exchange for money.

“The tokenization of capital is really the future. It’s going to provide new levels of liquidity and new levels of transparency. You already have most of the major exchanges with major blockchain initiatives,” said Stewart.

In fact, he said, blockchain-based tech will “evolve the global capital markets and create new paths for capital raising, liquidity and governance.”

BusinessInsider: Most ICO currencies are tradeable with Bitcoin. So a good way to diversify out of Bitcoin without alerting the IRS and HMRC is to trade into an ICO. if you’ve got $1 million in Bitcoin lying around, then throwing $100,000 into an ICO isn’t too painful, especially if you believe that ICO is going through the roof.

That’s the promise. Prices fall, too, of course.

“There will be a shakeout” Blockchain’s [Peter] Smith says. The dumb, non-transparent, risky companies will get washed away just like they did in the dot-com bubble of 2000. Eventually, the ICO market will settle in as a funding device for prosaic but valuable small-cap businesses that large banks usually ignore.