People are worried that the ICOs craze currently in the Ethereum startup environment seems to affect Ether’s price. Sell Pressure seems to emanate due to high Ether amounts that are raised to fund such projects.
Since the commencement of the year-long Ether token sale, there is a particular ICO that has managed to raise over $500. However, it will be unwise to let the harsh short-term realities to overshadow the long run potential positive benefits of such startups on Ethereum’s value.
The Long-term good
Good ICOs encourage cross-industry collaboration can generate funding to various newbie industries, ranging from gaming to energy, in the Ethereum blockchain space.
With appealing payment options and smart contract, the relatively risk-free blockchain that Ethereum provides presents enormous opportunities for both startups and established companies.
Apart from the cross-industry exposure, new Ethereum-based tokens generated during the ICO use transaction fees to create Ether demand.
When a new unregulated market emerges, bad ICOs will crop up that will only dump the Ether into the market. However, less of such behavior will thrive in a place where authorities carefully monitor and regulate the ICOs.
Regulation of ICOs cannot solely be the solution as the Ether’s value can simply fall if a company decides to cash out ether deposits to fund various projects.
Although ICOs can bring a short-term unfavorable effect on the Ether’s value, such successful projects can generate an invaluable long-term value to the Ethereum blockchain.