Jihan Wu, the Founder and CEO crypto mining firm, Bitmain in an interview with CoinGeek has heavily criticised the current model of investing in coin projects and referred to them as unstable and reflected more of a financial bubble.
His opinion about ICO investing comes at a time when the whole ICO market is going through a difficult situation. In fact, we have reported a few days back, how ICOs are losing its sheen among the cryptocurrency investors. From deteriorating quality of ICO projects to failing to complete the funding process, the market is plagued with negativity.
Wu categorically indicated that bubble in the ICO market is going to implode some point in the near future, stating that it is “just a matter of time,” and this model of new cryptocurrency funding will be eliminated completely.
I believe ICOs are kind of an unsustainable financial bubble. It will burst eventually. It’s just a matter of time. I believe it’s just one year or two. Either way, it will just disappear.
While Wu expects that the traditional form of investment such as equities, bonds will migrate to a tokenized platform like cryptocurrency exchanges. He feels that the current model of ICO investing which doesn’t guarantee investment protection, dividends, voting rights will find it very hard to survive as government regulations hit the market.
Wu blames the situation on rampant speculations of crypto tokens which have characterized the entire industry as being at the heart of the ICO model. Investors are more interested in taking away the profits rather than investing in projects and coin development which has real-world sustainability.
The interest is in profit alone, rather than creating any form of sustainability in the market.
Wu’s opinion comes at a time when his company is planning for an IPO deemed to be biggest in the history of the financial world and list its shares in the Hong Kong Stock Exchange. Wu is not alone on his bearish outlook towards ICOs, in fact, Binance, world’s largest cryptocurrency exchange which was bootstrapped through ICO, believes that the industry is in a bubble and will eventually pop up.
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