Initial Exchange Offerings were expected to replace Initial Coin Offerings by providing a more reliable platform for investors.
ICO offerings have been the rage of the crypto market in 2017 and some of 2018. Investor abandoned them because they were full of fraud and worthless projects.
IEOs were supposed to breathe new life into the private crypto investment market in 2019. But, after a quick start, they have fizzled in the second quarter.
The three main problems appear to be: many investors don’t believe anymore in the value of projects based on utility tokens. They have already lost plenty of money on the ICO wave of 2017-18 and are still losing.
Regulatory uncertainty enters very high liabilities in the field. No reliable data are available on the actual amount of money invested in IEOs.
Alternative Cryptocurrencies & Markets
Initial exchange offerings (IEO) started as a safer way of investing in new blockchain projects. A new market report from TokenInsight shows a diminishing interest by investors. An IEO is an ICO held by a crypto-exchange. It benefits from the publicity and liquidity of the exchange. Investors depend on the exchange to vet the token’s quality. The total IEO market volume peaked in May but started to slump quickly from June 2019. Analysts believe that utility tokens have lost money to many investors already, and now they are not considered reliable anymore. There are regulatory risks that prevent scaling. Finally, no reliable market data exist on IEOs.