Crypto bulls pile into ICOs at record pace despite Bitcoin rout

This article is by Benjamin Robertson for Bloomberg News. It appeared first on the Bloomberg Terminal. 

This year’s selloff in virtual currencies has done little to dent investor enthusiasm for initial coin offerings, which attracted a record $12 billion in the first half. That’s up from $7 billion for the whole of 2017 and a more than 50-fold jump from 2016, according to Autonomous Research LLP.

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Investors piled in even as Bitcoin fell as much as 70 percent from its December peak, many smaller tokens lost nearly all their value, and global equity markets slid on fears of a trade war. Much of the enthusiasm centered around two big offerings: EOS, a platform for open-source projects, and Telegram, a messaging service.

While bulls are hoping for a repeat of the eye-popping ICO returns seen in 2017, many of the blockchain-related projects funded by the offerings are likely to fail, said Lex Sokolin, global director of fintech strategy at Autonomous.

“This is a high risk sector,” Sokolin said by phone. “It is early stage tech and lots of it by definition is going to die.”