“ICO bubble has started to burst in the beginning of 2018, and the sum of investments from ICOs is nose diving. Token prices may fall another 90 percent.” said Jihan Wu, co-founder and CEO of Bitmain, at the prestigious Tsinghua University on November 2.
Wu echoed an industry concern over the unregulated, bubble-like nature of ICOs. He argued that initial coin offering (ICO), in essence, is a security issuance activity which should be under strict scrutiny across the globe.
“ICO brings two problems— information asymmetry and proxy investment— which are impossible to be solved by the blockchain technology.” Wu said.
The 32-year-old crypto billionaire said that “unregulated financial activities are the beginning of a disaster,” because unregulated ICOs allow scammers to waste a greater flow of financial resources, which dampens investors’ enthusiasm for innovations. In the ICO market’s Wild-West-like ecosystem, the bubble is popping and more and more ICO-derived tokens are heading to zero value or getting de-listed by exchanges.
He also touched on the topic of regulation and believed sound regulations will fuel the growth of blockchain financial market. “The financial market powered by blockchain has created unprecedented global connectivity. A wide variety of digital tokens are traded in the multinational market,or on hundreds of exchanges simultaneously, a rare phenomena for the finance sector.” Wu said.
He predicted that financial regulators of every country will compete to attract blockchain startups by creating a favorable environment.
“The blockchain market, with greater integration with traditional financial regulators, will significantly improve financial efficiency and offer a window of opportunity for startups and entrepreneurs to play their potential.” Wu added.
The staunch supporter of Bitcoin Cash thinks that in the next bull market, Bitcoin’s dominance on the market may further drop. As the oldest and most famous digital currency, bitcoin will certainly see a value growth in the future but some other cryptos which boast eye-catching innovations in technology and community governance will also surge in value.
Notably, Bitmain contributes to the establishment of the digital finance assets research center affiliated with Tsinghua University School of Economics and Management. The research center will commit itself to bridging the central banks that back fiat currencies and the the growing plethora of cryptocurrencies worldwide.
*Edited based on an article from 8btc.