History doesn’t repeat itself, but it does rhyme as Mark Twain famously quoted. The current climate as observed in cryptocurrency certainly bears a striking resemblance of the 2000s dot com crash.

374 Initial Public Offering (IPOs) (US$84.63billion*) and 541 IPOs (US$111.78billions*) were sold in 1998 and 1999 respectively, prior to the dot com crash in 2000. Currently, 46 Initial Coin Offering (ICOs) (US$96millions) and 139 ICOs (US$2.1billions) were sold in 2016 and 2017 (as of 31st August 2017) respectively. Witnessing a huge increase in coins offering for a wide variety of uses. This inevitably draws our attention to ICOs and its underlying technology. *values as of 2017, adjusted for inflation

ICOs have been around for a couple of years now, most notably with Ethereum raising funds through the sale of Ether to fund the development of the Ethereum platform. This has all been good, where developers with exceptionally good ideas raise funds to build out their product. However in recent years, ICOs are getting lots of attention from entrepreneurs and opportunists as an alternative form of raising capital, bypassing traditional financing methods (equity/debt financing). With 867 cryptocurrencies and counting (as of 31 August 2017), each advocating on a big idea that would revolutionize an industry. From coins for data storage to payments for writers, cryptocurrencies were introduced into the market and funding crowdsourced from both sophisticated and non-sophisticated investors through intense marketing campaigns. This presents real risks to the startup/investing community as traditional financing not only provides capital to new companies, but stringent due diligence will be conducted and terms are incorporated into contracts to ensure the viability of their business models and instill discipline to entrepreneurs running their businesses. With fundraising bypassing these investors and to the wider community (crowdfunding) the lack of insight and due diligence towards the companies raising funds, while also being misled by the marketing materials produced, retail investors are not in the position to make informed decisions with their investments.