One tidbit of information to shine some light on why cryptocurrencies have exploded in value this year… up to a total value of $138 Billion from starting the year at just $25 Billion…
Cryptocurrencies aren’t just currencies. For example, the #2 cryptocurrency is called Ethereum.
This year Ethereum launched a feature that enables a person—or group of people—to create their own cryptocurrency coin to sell to other people.
This led to a new method of raising funds for a project… an alternative to selling a stock on a stock market… or even raising money from a Venture Capitalist.
Traditional fundraising would involve forming a corporation, raising seed capital, building the company, raising venture capital, building the company, and then going public with an IPO.
That whole process costs millions of dollars just to raise millions of dollars. It’s effectively impossible for 99% of startup ventures.
Historically, fundraising has really been a catch 22. You could only raise money if you had millions to invest in raising money… most of which goes to attorneys’ fees.
Then came the Ethereum platform that offered an alternative that costs essentially zero and can launch a project in weeks instead of years, and most all of the money goes to actual operations and development instead of regulatory expenses.
In other words, Ethereum provides a a simple way for a person or group to directly raise money from other people, and it’s working fabulously. It’s called a token crowdsale or ICO, short for “initial coin offering.”
As a result, new cryptocurrencies have launched on the scene and THAT is what’s responsible for many of the billions of dollars of new cryptocurrency value.
In fact, Ethereum has risen from $8 to $302 so far this year, a 3,675% gain in less than a year!
In the same time frame, ICOs—or new token crowdsales—have raised more money globally in 2017 than then entire venture capital industry!
The implications are profound: Cryptocurrencies aren’t just offering a potentially better alternative to fiat currencies; they are offering a potentially better alternative to stocks, bonds, and other investment instruments. Watch out, Wall Street!