There have been several investments / capital raises that have surpassed the USD 100 million mark in recent weeks. Coinbase [raised a traditional $100M series D equity round](https://blog.coinbase.com/coinbase-raises-100m-series-d-led-by-ivp-f5f25cb51019) of funding, valuing the business at USD 1.6 billion (Its customer base grew 10x in the last six months!). An investor with ties to Vladimir Putin is [raising USD 100 million](https://www.bloomberg.com/news/articles/2017-08-08/putin-s-aide-seeks-100-million-to-rival-china-in-bitcoin-mining) through an initial coin offering (ICO) to build out a Russia-based Bitcoin mining operation in the hopes of competing with (or insulating itself from the threat of) China’s current mining dominance. And then there is Filecoin’s ICO that began last week with its [USD 186 million raised](https://twitter.com/MineFilecoin/status/895741305434783744) in the first hour… [ongoing](https://coinlist.co/).

**BLOCKINTEL’S TAKE**

It was only just over six months ago that successful capital raises in the space were measured in the tens of millions versus in the hundreds of millions plus! Capital is flowing into the space at a rapid pace, with Bitcoin and the overall cryptocurrency market cap both hitting all-time highs in recent days. Some of this is rational, though much of it is not.

We view Coinbase’s most recent raise as an example of rational capital arriving into the space. They have ridden the wave of cryptocurrency mania so far and manage to stay afloat. Interestingly, the capital they have raised to date is from seasoned, well-established venture fund managers. Though some investors may be caught up in the hype, this capital raise is nothing compared to what is happening on the ICO front.

Consider Tezos’ astounding USD 232 million ICO in July, which was mammoth by most any metric. They have yet to release a production version of their protocol, let alone proven any of their theories they are designing their system to explore. And yet, thousands of investors from around the world poured millions of their dollars into the ICO. (Full disclosure: BlockIntel’s cofounder, Brandon Thomas, is one of those thousands, as he participated in the Tezos ICO). However, their records only stood for a few weeks with Filecoin racking up USD 180 million plus within its first hours of opening up its ICO last week. Amazingly, over half a billion dollars has been invested in just these two projects, neither of which has launched yet. Thus, our assessment is that ICOs have become untethered from reality. Have you seen the acronym, [HODL](https://www.reddit.com/r/Bitcoin/comments/2b8t78/whats_hodl/) yet? It may be time to let go of at least some of these massive offerings.

A question we have been asked about this hysteria is, “how do you measure failure?”. Investors, users, and developers alike are all incentivized to present a positive sheen for the project, no matter what its actual state may be. Metrics can be padded or faked and failures in execution can also be masked. [Contact us](mailto:info@blockviewpartners.com?subject=Evaluating%20ICOs) to learn more about how we are solving this and other problems for our clients.