sport football: This Crypto Craze Is Making a Comeback

This Crypto Craze Is Making a Comeback

On June 5, stablecoin giant Circle went public at a valuation near $6.9 billion. By the end of the day, it was worth over $18 billion.

That's a 167% increase in less than 24 hours.

On day 2, shares popped another 45% intraday, making Circle's two-day moonshot of nearly 250% the highest in history.

As of this writing, Circle's market cap stands at around $27.2 billion.

By all accounts, Circle's much-anticipated initial public offering (IPO) was a blockbuster deal. And it signals renewed momentum in the crypto sector.

It paves the way for other privately held crypto firms like Kraken, Chainanalysis, and Consensys to eventually hit public markets, too.

But as huge as Circle's IPO was – and it was headline-grabbing – I believe a public offering for another stablecoin that occurred just four days later could be even bigger.

Here's the thing: The deal for that company was less than one-tenth the size of Circle's IPO.

That's right. This deal was about $500 million.

Yet, I believe this deal will have greater ramifications for readers of Digital Asset Daily than Circle's headline-grabbing news.

The Return of the ICO Craze

Four days after Circle went public on the New York Stock Exchange, a small stablecoin-focused blockchain network called Plasma also went public.

The company initially sought to raise $250 million. But it quickly raised the figure to $500 million due to high demand. The limit was filled in under five minutes.

But Plasma didn't go public via an IPO. It went public via an initial coin offering (ICO).

And even though its raise was small potatoes compared to Circle's $60 billion IPO, the implications are just as huge for investors.

If you're a longtime follower of Daily editor Teeka Tiwari, you'll likely recall the ICO craze that swept the crypto market in 2017 and propelled some then-tiny names like Polkadot (DOT), Filecoin (FIL), and Tezos (XTZ) into well-known projects.

ICOs are similar to stock market IPOs… But they generally raise capital via cryptocurrencies like bitcoin or stablecoins rather than fiat currencies like U.S dollars.

That ICO craze didn't last too long, however.

Unlike the current pro-crypto Trump administration, the Securities and Exchange Commission (SEC) under his first administration was hostile to crypto. And it used regulations from the 1930s (like the Howey Test) to smother ICOs in the crib.

The agency fined several companies for issuing illegal securities and forced them to return the money they had raised from their ICOs to investors.

This sent many projects seeking to launch ICOs fleeing to friendlier jurisdictions like Bermuda, the Cayman Islands, and Dubai. And for the past several years, the ICO sector has basically gone dormant.

In my view, the ICO crackdown has been detrimental to crypto investors like us.

The strict regulatory scrutiny forced projects to turn to venture capital (VCs) and angel investor checks to raise money instead of participants in the ecosystem, which is what blockchain technology is all about.

Private capital flooded into the early-stage rounds and ballooned valuations into the billions of dollars.

Here's why that's a problem…

When the tokens behind these projects are eventually listed on exchanges, VCs use the launches as exit liquidity for their positions – making most of the profits and leaving retail investors holding the bag.

But that's why the news I'm sharing with you is so exciting.

Plasma's launch on June 9 suggests the investor-led ICO market is making a comeback. And it's a positive development for crypto investors.

That's because projects can once again crowdfund their platforms. And it'll give non-accredited investors (people with a net worth less than $1 million) the chance to get in on the ground floor, leveling the playing field between VCs and retail.

Remember, ICOs were key drivers behind the launches of projects like Ethereum and Neo, which Teeka recommended back in April 2016 and February 2017, respectively.

Ethereum is up nearly 31,000% since then, and Teeka's subscribers had the chance to book gains of as much as 151,323% on Neo.

That's the beauty of these ICOs… They give you the opportunity to make what Teeka calls "asymmetric" returns. That means the upside potential of ICOs is much higher than their downside risk. So you don't need to bet a lot to make a lot on these deals.

Now, I want to be clear: I'm not recommending you buy the Plasma ICO.

What I'm saying is a friendlier regulatory environment will jumpstart the ICO market, bringing back opportunities like we saw with Ethereum and Neo.

Take the introduction of the CLARITY Act in the U.S. House, for example.

This new regulatory framework establishes clear legal definitions for digital assets. No more using 1930s-era regulations to stifle innovation.

Now, the bill still needs to work its way through Congress and eventually make its way to the White House. And if it does, I believe it'll be incredibly bullish for ICOs.

See, in addition to my role as Teeka's chief analyst at Big T's Crypto Income, I'm also Director of Venture at the crowdfunding platform Republic.

So I've had the opportunity to review drafts of this legislation and even make recommendations, including adding key language about early sales and user activity.

It's one of the things I like about the current SEC. It actively seeks input from people in the trenches like myself, which is the polar opposite of the previous regime.

The ICO Revival Is Just the Tip of the Iceberg

The ICO renaissance is all part of a phenomenon we call The Convergence. If you're not familiar with The Convergence, it's the confluence of three major trends…

The launch of exchange-traded funds (ETFs) focused on crypto income tokens… A friendlier regulatory landscape… And mass financialization of crypto products leading to global institutional adoption. (You can learn more by going here.)

When we first introduced our research on The Convergence, bitcoin was trading a hair below $54,000. Since then, it's traded as high as $112,000. And it's poised to break out to all-time new highs again at any moment.

Our research suggests the biggest gains from The Convergence, however, will come from a tiny subsector of crypto tokens that have automatic payouts.

We call these "crypto payouts."

Over the past week, payout tokens we've recommended in Crypto Income have appreciated as much as 16.9%, 14.8%, and 10%.

What makes this subsector of tokens unique is that they have automatic payouts that generate income month after month after month… no matter what's happening in the market. That's why we call them crypto payout coins.

You receive this income through a process called "staking" delivered directly to your crypto wallet.

It's somewhat similar to the way some stocks pay dividends. Instead of receiving cash, though, you receive more of the underlying crypto. And we expect some of the new generation of upcoming ICOs to include crypto payout tokens.

Teeka recently held a special briefing to explain how these three catalysts will push this tiny subsector of the crypto market much higher.

You'll also get details about six crypto payout tokens we're targeting in this niche sector. So make sure to watch the replay right here.

The revival of the ICO market is a clear sign The Convergence is underway. And now that we have a crypto-friendly administration, there's a huge race to bring all of traditional finance on-chain.

The good news is we're still early in the game.

Stay curious,

Graham Friedman