Singapore and Hong Kong are leading hubs for Initial Coin Offerings

25 September 2018 Authored by Consultancy.asia

Singapore is one of the globe’s leading hubs for Initial Coin Offerings according to the latest available data. Despite hosting fewer closed ICOs than the US in 2018 so far, Singapore’s offerings have yielded $100 million more, while Hong Kong has similarly seen an improvement in the market, thanks to mainland China’s crackdown on ICOs in 2017.

On the back of the cryptocurrency boom, the popularity of the Initial Coin Offering (ICO) remains at a persistent high, despite anxiety regarding the volatility of such platforms, as well as their propensity to be gamed by con-artists. An ICO is a means of crowd funding which depends on cryptocurrencies such as Bitcoin or Ethereum – or increasingly, legal tender – to help start-up companies looking to source capital. During an ICO, a quantity of the cryptocurrency in question is allocated to investors in the shape of “tokens”, which become functional units of currency when the ICO’s funding goals are met and the project launches.

The first ICO took place in 2013, with a total of two taking place that year, but have seen meteoric growth ever since. In mid-2018, ICOs have gained further momentum as an alternative form of crowd funding, as hybrid models – which combine traditional venture capital or private equity funding mechanisms with ICOs – are increasingly establishing themselves as a valid funding alternative. The continued rise of the ICO in 2018 has even seen the funding technique yield its first pair of unicorns (start-ups worth over $1 billion), with Telegram and EOS boasting a record breaking $1.7 billion and $4.1 billion respectively.

Singapore and Hong Kong in leading countries for ICO’s

Beyond these two record breaking campaigns, the other top ICO campaigns raised significantly smaller hauls; however, they still yielded significant figures. Singapore hosted the world’s fourth largest ICO, the Huobi Token, which delivered $300 million of investment. Launched by Huobi, the third-largest cryptocurrency exchange in the world, the Huobi Token is geared toward rewarding exchange users for their loyalty with lowered transaction fees, while also carrying its own value in tradable pairs against popular currencies. Huobi boasts millions of users, mostly located in Asian countries.

Singapore’s bullish cryptocurrency performance does not end there, however. Indeed, the island city state was the third largest home of ICOs in terms of funds realised – totalling $1.1 billion – and the second largest in terms of the volume of ICOs hosted. According to data gathered by PwC’s strategy consulting wing, Strategy&, in cooperation with Crypto Valley, the US, Singapore and the UK remain the world leaders on the ICO front in terms of volume. The trio have closed 157 successful ICOs between them already in 2018, with a further 153 planned before the end of the year.

Singapore and Hong Kong

In terms of the value of the ICOs, Singapore was only behind the anomalies of the British Virgin Islands and the Cayman Islands, which hosted the ICO unicorns mentioned but few other campaigns, while in terms of volume, Singapore’s 53 campaigns were only surpassed by the global financial hub of the US, at 56. Broadly speaking, then, these figures would make Singapore the most consistent top performer when it comes to the ICOs it hosts. According to those at the head of the burgeoning industry, however, there is still plenty of room for growth and development in Singapore’s ICO scene before it can be properly established as a world leader.

The largest Initial Coin Offerings to date ($ million raised)

Singapore’s Cryptocurrency and Blockchain Industry Association’s Chairman, Anson Zeall, told the South China Morning Post; “We cannot say Singapore has become an ICO hub yet, as more work needs to be done, but yes, there has been a lot of activity since September last year.”

Partially, the thriving ICO scene in Singapore is the result of restrictions occurring elsewhere in Asia. China issued a noted ban of ICOs in September 2017, which has since sent lucrative start-ups looking to raise funds into the arms of the regional superpower’s local rivals. This has pushed blockchain start-ups flocking to Hong Kong – which is also enjoying heightened cryptocurrency and ICO activity – where there’s more freedom than Mainland China, and to Singapore, where start-ups are launching their token sales. Hong Kong saw 20 closed ICOs earlier in 2018. Those yielded $223 million in funding, while the country is home to a further 15 planned before the end of the year.

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