Page 7 - May 2018 Disruption Report Flip Book

via ICO Offerings
thly, US$m)
als) deals)
1 deals)
Number of deals (RHS) 4 4
3 2 1 8 0
ICO’s emerged a issuances of clos issued in 2018 Y was for infrastruc (14%). The finan
for identification and background checking software, blockchain and trade monitoring.
D.] ICOs – A Risky New Paradigm?
J A NMUAAYR Y2 0 21 08 1 8
An ICO (Initial Coin Offering) is a fundraising mechanism which gives investors participation rights in a future project via newly issued tokens or digital coupons (new crypto-currencies) in exchange for legal tender or existing, more liquid crypto- currencies such as Bitcoin or Ethereum. The token confers participation rights in the underlying projec
C R Y P T O C U R R E N C Y
t but usually no ownership rights in the company.
8 0 2 4 6
91
INITIAL COIN OFFERINGS BY CATEGORY IN 2017
Figure 95. Initial Coin Offerings by Category, 2017
Real Estate, 1%
March 2018 Art & Music, 1% Citi GPS: Global Perspectives & Solutions
Bitcoin
US$ 20,000 18,000 16,000 14,000 12,000 10,000
8,000 6,000 4,000 2,000
0
Gambling, 3% Ethereum
Gaming, 5% US$
Identity & Others, 8% Reputation, 1%
Advertise, 2%
Infrastructure,
34% Rippl US$
3.5 100x fold 3.0
Figure 86. Major Cryptocurrency Prices in 2017-18, US$
Healthcare, 6% 1,500 14x fold
increase in 2017 1,200 Data Storage, 8% 900
increase in 2017
2.5 2.0 1.5 1.0
Bitcoin prices
peaked at 600
c.$20,000 in
Dec'17 Payments, 8% 300
Finance, 10%
Trading & 0.5 Investing, 14% 0.0
0
Source: CoinSchedule, Citi Research
Source: Coinmarketcap, Citi Research (all charts)
We believe this partly reflects the larger effect that flows into smaller currencies have had,
s a material source of early stage funding in 2017 with total
There are close to 1,400 different cryptocurrencies trading globally with the total
as well as the growing awareness and dissatisfaction with the flaws in the design of Bitcoin
e to $4 billion, spread over 200 deals during the year ($3 billion
market value of widely traded cryptocurrencies at approximately $400 billion, which
is substantially lower than their peak of ~$650 billion in January 2018. Interestingly,
itself. In the current market pie, Ethereum holds ~20% share, followed by Ripple XRP ~10%
T D o v e r 7 1 d e a l s ) . N e a r l y a t h i r B d i t c o o i f n ’ a s d l l o m I C i n a O n c e f u i n n t h d e i g n l o g b a r l ma a i s r k e e t d v a i l u n e 2 h a 0 s 1 s t e 7 a d i l y d e c r e a s e d f r o m ~ 9 0 % and Bitcoin Cash 5% (subset of the original Bitcoin, created after a fork on August 1, 2017).
in January 2017 to ~40% in March 2018.
ture-related companies, followed by trading and investing firms
(Bank of the Future, CitiGPS, March 2018)
We believe this partly reflects the larger effect that flows into smaller currencies
ce sector accounted for ~10% of funds raised via ICOs in 2017.
have had, as well as the growing awareness and dissatisfaction with the flaws in the design of Bitcoin itself. In the current market pie, Ethereum holds ~20% share, followed by Ripple XRP ~10% and Bitcoin Cash 5% (subset of the original bitcoin,
CRYPTOCURRENCY MAcrReaKtedEafTterMa foArkRonKAuEguTst 1S, 2H01A7).RE BY VALUE Figure 87. Cryptocurrency Market Share by Value, USD
e XRP
Nearly 350x fold increase in 2017
Prices peaked at $3.4 in Jan'18, but soon declined back to sub $1 levels
Monero 1%
Other 5%
Total Market Value c.$18bn
Total Market Value c.$660bn
Other,
Stellar, 20% 2%
NEM, 2% Litecoin,
2% Cardano,
3% Bitcoin
Cash, 6%
Ripple XRP 12%
Bitcoin, 35%
Ethereum 18%
NEO, 2% Cardano, 2% Litecoin, 3%
Bitcoin, 43%
Stellar, 1%
Other, 17%
Ethereum 19%
Total Market Value c.$430bn
Litecoin 1% Ripple
XRP, 1%
Ethereum 4%
Bitcoin 88%
Bitcoin Cash, 5%
Ripple 8%
Jan 2017 Jan 2018 Mar 2018
Source: CoinDance, CoinMarketCap, Citi Research
Who is Buying Bitcoins?
Nearly 70% of all Bitcoin trades are denominated in U.S. dollars (USD), followed by
© 2018 Citigroup
Japanese yen (JPY) and euros (EUR) with about 10% each. China used to be a major market for crypto-trading and at its peak in 2016, commanded over 90% of all trading volumes. However a regulatory clampdown on virtual currencies and ban on digital token sales (ICOs) in 2017 have now wiped out Chinese yuan (CNY)- denominated trading in Bitcoins.
© 2018 by Canfield Press, LLC. All rights reserved.
www.canfieldpress.com 7
e 2 7
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
Dec-16 Jan-17 Feb-17 Mar-17 Apr-17
May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18