Are ICOs missing out by failing to embrace stable coins?

The Initial Coin Offering market continues to move forward and investors are rushing to invest, some with the knowledge of the product or service being offered to be built and others for the fear of missing out (FOMO).

The first three months of 2018 has already surpassed 2017. $6.3bn and counting — that’s a staggering 118% more than 2017.

2018 also saw some of the biggest raises; Telegram $1.7bn; Dragon $320mn; Huobi $300mn. Such investments set a benchmark to the wider industry — team, traction, revenue, signed contracts, shipped code, monthly active users all play a part. Agree this is hard work, raising all that money but what is harder is keeping the value of these investments intact.

Volatility means inconsistency.

Hodling investments in crypto assets is not a very smart option as ICOs have come to realise. The first quarter of 2018 dealt heavy losses to the cryptocurrency markets, the capitalization of the combined crypto markets dropped by 59% since the start of January. BTC alone dropped by 50% while ETH dropped by 74%.

BTC and ETH have now gained back some of the losses and currently trading at $8000 and $500 at the time of writing. Not everyone has the stomach for such volatility and psychologically too one would sleep well knowing that investments will not be eroded overnight.

Losses in a volatile market are real and unavoidable. In the first quarter of 2018 there were ~202 deals averaging a size of $31mn per ICO. 75 of these ICOs were done in the month of January — that’s a total value of $2.3bn raised and by end of the quarter these investments had halved by value.

De-risking through stable coins

ICOs can benefit tremendously by swapping their volatile crypto assets — typically BTC and ETH — with a stable coin that is not only less volatile but also is able to hold its price and act as an effective store of value.

Protect the value of an ICO

By exchanging coins raised into AAA Reserve or another stablecoin you protect the value and of your raised funds — so you can build your business in the knowledge that your raised funds are stable and secure.

AAA Reserve has the added benefit of facilitating faster and cheaper international payments, when it comes to paying salaries to your global team and suppliers. To find out more visit www.aaareserve.com