Exclusive: CoinGecko’s Bobby Ong claims IEOs will be a short-lived trend mimicking the 2018 ICO market
Think back to a year ago, was the crypto-space the same?
Forget the crypto-winter of 2018, the price freefalls, the nay-sayers foretelling the Bitcoin plummet below $1,000 and the alt-heads running amuck, recall the hype around the initial coin offerings [ICO]. Once the most popular way of getting off your feet in the cryptocurrency market, one thing 2019 has taught us is that ICOs are firmly a thing in the past.
Replacing the “C” with an “E,” several exchanges are jumping on the IEO bandwagon, with tremendous success for both parties. Binance, Huobi, OKEx have all supported token launches, with trend only growing, however, some influencers with the cryptocurrency space are not hopeful of the long-term sustenance of IEOs.
Bobby Ong, the CEO and cofounder of CoinGecko, one of the leading crypto-markets aggregator, in an exclusive interview with AMBCrypto, stated that IEOs will have a short lifespan, comparable to the ICO trend of 2018. The current token sales are undoubtedly the cream of the crop with the exchanges platforming them at the top of their game, but sooner or later there will be a drop in quality.
“I’m observing similar trends [to the 2018 ICO market] at this point in time where there’s all this exchange-operators, pretty much, desperate to get projects to come on board, to get listed on the exchange. But there’s only so many good projects that can conduct the token sale at any point in time.”
Projects that have been pushed on the IEO platforms have been the best of the best, but as the market and the investors move on the other lower quality projects will also want lift-off, and platforms will be created for the same, commensurate in quality.
As token sales are conducted on exchanges with lower and lower profitability and popularity compared to the top-dogs the token price rallies will lose steam. This decrease in the IEO output would result in projects, eventually, moving out of the space, opting for a different approach to funding, and exchanges would respond in the same manner.
“As exchange[s] get desperate, they will go and search for projects that are equally desperate to do an IEO…the quality of project will go lower and lower and lower. You can’t expect demand to be as high as it was on Binance.”
In Ong’s view, the emphasis for the token sale will be on the “exchange platforms” that conduct the IEO. They hold the key in the “curation,” of which project will actually fill in the IEO space, and hence it will be their job to maintain quality.