The obituaries for the ICO market are pouring in - but as famous Welsh poet Dylan Thomas urged, it's not looking like ICOs will go to their graves gently.

A dead market, or just a return to the norm? The ICO market could have life left in it yet. Photo: Anton Darius Unsplash

Although anecdotal reports bemoaning the state of the initial coin offering (ICO) market are seemingly appearing everywhere, the statistics for the first month of the new year are telling a very different story. A revolutionary new funding method, in its short life the ICO has both catapulted numerous companies to short term success and likewise, attracted its fair share of criticism.

Hard as it is to believe we've rocketed through one twelfth of 2019 already - the ICO data for January is in - and if ICOs are dying, they're definitely not going gently in to the good night.

How do we know this? Well for us to understand the current state of the ICO market, it's best we view it through the lens of the past. Without further ado, let's do what any good researcher should and dive straight in to the data.

In 2013, the first two ICOs ever launched made their debut. If we are to take money as the sole metric for ICO raise success, Mastercoin took poll position in the 2013 token sale race.

By today's standards, Mastercoin performed fairly poorly. But in 2013, it had just made crypto history, raising $600,000 purely from pre-issued cryptographic tokens, with an as-of-yet unproven value. In addition to this historical feat, it also beat its only other competitor, NXT, into submission - which took just $16,800 in comparison during the latter half of the year; bringing total ICO raises during 2013 to a not-so-grand total of $616,800.

Fast forward six years later to January 2019 - where we've witnessed over 24 ICOs successfully concluded in just 31 days, seen an average daily raise of over $9 million dollars, and a total raise of $291 million dollars - and it seems like the heart of the ICO market is still very much beating.

In fact, the single largest individual raise during this January took more than the amount raised from all of the nine ICOs concluded during January 2017, pretty impressive right? But there's more. The ICO class of January 2019 likewise saw a total raise which was almost triple that of the whole of 2016, and several orders of magnitude greater than the years 2013, 2014 and 2015 combined.

So far, if the first month of 2019 is anything to go by, you might wonder why there's an exodus away from the ICO funding model. At this point, if you're paying attention, you're probably thinking I've missed something. Something important, and you'd be right. A gigantic black-hole of crypto history which until now I may have purposefully omitted - the entirety of 2018.

January 2018, the absolute peak of decentralized insanity, saw $2.14 billion dollars of capital poured in to ICO raises. That's $1.8 billion greater than during January 2019.

Helped in part by the conclusion of the $4.1 billion EOS initial coin offering, and the Telegram ICO private pre-sale, the historic level of funding entering the ICO space in January of 2018 was surpassed only by March and June of the same year, which raised $4.5 and $5.8 billion respectively.

Of course, these record-breaking raises were little comfort to a market which lost $700 billion of its capitalization during 2018, and for many blockchain investors, it would be comforting to pretend the 2018 crypto market roller coaster hadn't happened at all.

But to view the meteoric rise and subsequent catastrophic fall back towards Earth as the death throes of the ICO market may be short-sighted to say the least. Rather, it's probably better viewed as a healthy return to 'normal' - and discounting the mania and subsequent depressive slump following the immense bull market of late 2017 to early 2018, the ICO market has proven by its January 2019 performance that it's experienced strong year-on-year growth.

So, what does the future look like for initial coin offerings? During 2019, it's likely that only those ICOs whose tokens have a genuine utility are likely to gain traction. By comparison, of the 1082 ICOs which concluded in 2018, despite record breaking raises, many have failed to make it past the starting gate.

Regulation has weighed heavily on the ICO market. Many ICOs which started in good faith found themselves at odds with increasing scrutiny from regulatory bodies the world over. Most feared among these ICO harbingers of doom have been the U.S. Securities and Exchange Commission (SEC), who have been relentlessly pursuing those offerings which have crossed the thin line from utility token to digital security.

Perhaps in an effort by the blockchain industry to combat this crackdown, there's a new token in town - the security token. Estimated to be worth $10 trillion by 2020, security token offerings (STOs) leave no doubt as to their function and identity - they are cryptographic representations of real-world assets, subject in most cases to the same laws governing traditional securities.

But although STOs are likely to be most in vogue during 2019, the ICO, the original crypto funding device, could find renewed interest as companies develop use cases which genuinely require a token to function.

Just like the dot. com boom and bust, the decade that followed the almighty web-based slump saw healthy and steady increases in the most promising projects in internet technology; many of which are now household names, impossible to imagine life without. Today, we may be seeing the same happening as the ICO market matures.

While the ICO market is still just six years young, it might be too early for us all to be writing its obituary. So, are ICOs dead in 2019? Or have they simply finished their painful birth, and now they're down to serious business?