Data shows a total of 92 ICOs have collectively raised $1.25B in 2017; Goldman Sachs says ICO funding surpassed angel and early stage VC funding in June, July
Arjun Kharpal / CNBC :
Context & Ripple Effects
The ICO market has been compounding all summer: just weeks ago Smith + Crown counted 65 projects raising $522M for the year ($522M across 65 projects), and this Goldman Sachs datapoint shows the curve steepening — 92 ICOs have now pulled in $1.25B, enough to out-raise angel and early-stage VC in June and July.
That crossover is the story: a completely unregulated channel, which the New York Times flagged for abuse potential back in June, is now beating the institutional seed apparatus at its own game. By December the full-year tally would hit $4B, up from $225M in 2016 ($4B in 2017 vs $225M in 2016).
First-order effects
- Early-stage blockchain founders gain a funding route that bypasses seed VCs entirely, and Goldman's own numbers tell traditional investors the seed-stage pricing power has shifted toward token issuers for at least these two months.
Second-order effects
- VC firms are forced to compete on the token rails themselves — Blockchain Capital's move to raise roughly $85M toward a $150M target across two funds (Blockchain Capital's two token-era funds) shows incumbents retooling rather than ceding the category.
Third-order effects
- The pattern in the surrounding coverage is a classic boom-bust: issuance peaks at $13.7B in five months of 2018 ($13.7B in early 2018) before collapsing to about $118M by Q1 2019 ($118M in Q1 2019), with only 30% of ICOs since 2013 closing successfully — suggesting unregulated fundraising channels inflate and deflate far faster than equity markets, and pull regulatory attention in behind them.
The trend: Token sales briefly overtook the traditional seed-funding stack in 2017, and the subsequent collapse shows how quickly unregulated capital channels can scale — and unwind — relative to venture finance.