Friday, December 2, 2022

Forbes Said Bitcoin Price Exploded Because of ICOs — Wrong

Forbes Said Bitcoin Price Exploded Because of ICOs — Wrong

A Forbes columnist just wrote that the rat race to enter the ICO craze is the main reason for the current bitcoin price explosion. Yet a fundamental assertion made in the column doesn’t hold up under scrutiny. 

Also read: Major FX Market CME to List Bitcoin in 2018

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In a new guest column, Forbes contributor and former U.S. Trading Commissioner Bart Chilton attributed Bitcoin’s current series of all-time price highs as resulting from “most ICOs [being] funded using Bitcoin.”

Per the ex-Commissioner:

“When the funds are actually invested in the ICOs, the currency used is—by and large—Bitcoin. Therefore, Bitcoin serves as the predominant liquid asset behind all these ICOs.”

Chilton, then, sees the ongoing ICO craze as fueling Bitcoin’s recent astounding price surge.

And while Chilton is perhaps indirectly correct, to the extent that some novice investors are surely hearing about ICOs and then getting into Bitcoin and crypto for the first time, he is incorrect in suggesting that Bitcoin is the predominant currency of choice for participants of ICOs.

That’s because that honor goes to the #2 crypto by market capitalization, Ethereum. Makes sense, of course, since Ethereum’s fundamental smart contract product is the ICO.

Let’s break it down.

Ethereum, Not Bitcoin, Dominates the ICO Market

Even back at the beginning of June, Ethereum—namely its associated currency, etherwas responsible for holding a 76 percent supermajority when it came to being the digital currency of choice for investing in ICOs.

Ethereum’s share of the ICO market broken down.

And since dozens more ICOs have launched since June, many of them being run on Ethereum smart contracts for ERC-20 tokens that predominantly accepted ether, Ethereum’s dominance over ICOs surely has only grown since the summer.

Clearly, then, Ethereum is the crypto “of choice for ICO’d digital assets,” as TechCrunch’s Jason Rowley puts it.

Accordingly, Chilton’s implicit suggestion that bitcoin is the currency of choice for ICOs is technically mistaken, though presumably it was just a well-intentioned oversight on the ex-Commissioner’s part.

What do you think? Will Ethereum’s dominance in the ICO market continue unchecked for the foreseeable future? Be sure to sound off in the comments below!

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