Ep244: ICOs Token Sale Failure Rate, Crypto Forcing Banks to Innovate or Adopt

ICO and token sales suffer nearly the same failure rate as most business start-ups. Dutch RaboBank is looking at creating a cryptocurrency wallet. Poloniex is acquired by Circle. JP Morgan and Bank of America admit that cryptocurrency is very competitive. Germany won’t tax bitcoin when used as a payment. US Department of Justice is making a boogieman out of crypto money laundering. Bitcoin SegWit has seen an increase in segwit adoption up to 30%.

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Song: Stuck up

Traditional Financial Markets Cryptocurrency Markets
Gold $1,316 Bitcoin Cash (BCH) $1,302
Silver $16.46 Bitcoin SegWit (SW) $10,985
Oil $61.33 Ethereum (ETH) $875
Dow Jones 24,609 points DASH $619
30Y UST Yield 3.094% Litecoin (LTC) $214

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As if we didn’t warn you enough already ICOs and token sales are inherently risky “investments” this story from bitcoin dot com ought to provide ample proof. 46% of last years ICOs have already failed! Token Data has been tracking more than 900 ICOs and the numbers should not be that surprising. 142 failed at the funding stage and 276 have failed since then. Furthermore 113 can are on the fence with either no communication from the team or no community using the coins.

59% or nearly 2 out of 3 ICOs have failed to live up to the hype. With this in mind I have some news to share with you regarding the future of NeoCash Media! During my vacation I have done some critical thinking into what sort of content I ought to create. I’ve decided to develop a comprehensive ICO and token sale rating system. Hopefully the content can serve as an early warning system for scams and money-grabs.

Dutch financial services provider Rabobank is gauging interest in a cryptocurrency wallet service

According to a statement on Rabobank’s website, “The idea of Rabobit is a cryptocurrency wallet within the online banking environment.” and “insiging into overall liquidity by having bank accounts and cryptocurrencies in one place”.  

There is not much more information at this time.  It’s interesting to see banks start to show an interest in providing cryptocurrency wallet services.  This could be for people who want their crypto secured and insured against loss.  Possibly interest could be paid by the bank.  The user would of course loose full control over their wallet.

Poloniex has been sold to Circle. Backed by Goldman Sachs, Chinese internet company Baidu, and more. Circle is looking to change the global economy and owning a cryptocurrency exchange is going to give that effort a boost. We can expect increases in know-your-customer requirements that may or may not affect the volume the exchange processes.

JP Morgan Sees Disruption Threat from Crypto currencies

In the firm’s annual 10-K filing with the SEC on Feb 27th, “Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation. New technologies have required and could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”

In other words, JP Morgan sees a threat to some of its fee revenue with cryptocurrency opening up options to cut out intermediaries.

In related news, on Feb 22nd Bank Of America filed its own 10-K with the SEC where that document also raised potential crypto currency challenges.  Including difficulties complying with KYC and AML rules when using digital assets and losing business to less risk-averse companies willing to to try the cryptocurrency space.

As reported previously on Neocash Radio, Bank Frick based in Liechtenstein will over customers the ability to buy, sell, and hold ethereum, bitcoin, bitcoin cash, litecoin, and ripple.  This is now live and more banks are expected to follow.

Germany won’t tax bitcoin users for using cryptocurrency as a means of payment

In guidance published this past Tuesday, Germany’s Ministry of Finance will regard bitcoin as the equivalent to legal tender for tax purposes when it is used as a means of payment.  This is in contrast to the US where the IRS classifies cryptocurrencies as capital subject to capital gains taxes.

US Department of Justice starting Crypto Currency Strategy

During a Feb 26th discussion at the Financial Services Roundtable, US Deputy Attorny General Rod Rosenstein stated that the DOJ has recently formed a cybersecurity taskforce to develop “a comprehensive strategy to deal with” the use of cryptocurrencies for money laundering.

Bitcoin Segwit adoption climbs to over 30%

In welcome news to the Bitcoin Segwit chain, Segwit use is steadily increasing after Bitcoin v16 was released with native Segwith support.  A reduced number of average transactions along with Segwit usage increase and exchanges batching transactions has essentially cleared the mempool where it sits less at less than 3,000 unconfirmed transactions with resulting fees being drastically reduced from their highs.

This is a huge difference compared to when unconfirmed transactions were over 250,000 in late December 2017.  The question remains as to how the Bitcoin Segwit will be able to deal with a spike in transactions during the next bull run in price.

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