How STOs Could Drive The Crypto Markets in 2019
January 16 2019 - 7:40AM
ADVFN Crypto NewsWire
Security Token Offering (STO) on Laptop
Slovenia, November 17, 2018Getty
One
area of potential excitement for the evolution of crypto markets in
2019 is the coming fruition of issuing securities using blockchain
technology. Many crypto enthusiasts believe one of the next
big things in the cryptocurrency markets is the expectation that
Security Token Offerings (STOs) could become the eventual
replacement for Initial Coin Offerings (ICOs). While this
expectation is contingent upon a number of key issues and barriers
being overcome, with the largest hurdle being clear regulations,
STOs could drive the next wave of blockchain innovation.
Could an upcoming STO wave drive the utility and pricing of
existing cryptocurrencies such as
https://forbescrypto.com/crypto/bitcoin_btc"
href="https://forbescrypto.com/crypto/bitcoin_btc" rel="nofollow
noopener noreferrer" target="_blank">Bitcoin (BTC),
https://forbescrypto.com/crypto/ethereum_eth"
href="https://forbescrypto.com/crypto/ethereum_eth" rel="nofollow
noopener noreferrer" target="_blank">Etherum (ETH),
https://forbescrypto.com/crypto/xrp_xrp"
href="https://forbescrypto.com/crypto/xrp_xrp" rel="nofollow
noopener noreferrer" target="_blank">XRP (XRP), and
others?
In late 2017, and early 2018, the
total size of cryptocurrency markets started to approach nearly $1
Trillion after several years of explosive, exponential growth.
A good portion of that increase could be
attributed to the Initial Coin Offering (ICO) wave that contributed
to the euphoria and demand that drove Ethereum to over $100 Billion
in market capitalization in late 2017 into early 2018.
Ethereum, along with Bitcoin, was one of the key assets used
by investors to participate in ICOs. Purchasing ICOs became the
primary key utility of Ethereum during the time period.
The Rise in Ethereum Coincided With the
ICO Wave forbescrypto.com
Please see http://forbescrypto.com"
href="http://forbescrypto.com" rel="nofollow noopener noreferrer"
target="_blank">forbescrypto.com for additional pricing and
information
Shy of $1 Trillion at its peak, the value of all
cryptocurrencies is a drop in the bucket when compared to
approximately 60 global equity markets at nearly $80 Trillion in
size
While there has been a lot of hope
for widespread adoption of blockchain, the practical usage of the
vast majority of cryptocurrencies is just speculative trading and
potential store of value. STOs could be one of the
key killer mainstream applications of blockchain and
cryptocurrencies that could change this.
If the ICO wave is any indication,
STOs could have much broader ramifications for the future growth
and adoption of several key cryptocurrencies that could become key
participation methods for purchasing and trading these securities.
Similar to the effect that ICOs had on the demand for Ethereum,
STOs could be a rising tide that once again gives a significant
boost to the overall expansion of the cryptocurrency
market.
A few key questions remain before speculation as to what tokens,
companies, exchanges or other participants might possibly benefit.
The first is what is the timing of regulations that
will allow advisory, issuance and legal trading of these
blockchain-based securities? Another is what will be the key
funding mechanisms used? Will existing cryptocurrencies such as
Bitcoin, Ethereum, XRP be used, will stablecoins be the key medium,
or will new tokens emerge? How will existing ecosystem providers
such as exchanges, advisors, and other platforms or technology
providers participate?
Clearly, when and if STOs gain
traction, it could be many multiples larger than the ICO wave that
preceded it. But, what could this mean for existing
individual cryptocurrencies and blockchain companies remains to be
seen?
Source: Forbes
Jim Preissler Contributor
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