When ICOs became popular, market players mulled over the idea of furthering the technology to allow for tokenisation of securities. However, there were limitations around this idea, such as regulatory concerns.
In 2017, there was a boom in initial coin offerings (ICOs), a financial instrument that was seen as an investment option and a fundraising channel for mainly cryptocurrency-related companies. Like a traditional IPO, an ICO is a method for companies to raise funds, but via blockchain-based platforms.
Instead of buying shares for the potential appreciation value, however, investors buy cryptocurrencies issued by the company, betting that these tokens will gain. Ethereum, for example, issued its ICO in 2014 at 31 US cents apiece. Today, its token Ether is the second largest cryptocurrency by market capitalisation at US$2,637 ($3,567) apiece as at Feb 23.
