Crypto currency expert and founder of Transform Group and BitAngels investor network Michael Terpin believes that there is light at the end of the Coronavirus crisis. In a recent interview with Blockchain News, Terpin goes through the state of Decentralised Finance, regulation and the crypto market performance and how the current Covid-19 pandemic is affecting blockchain and crypto.
Michael Terpin believes that at this stage of the pandemic, investors and blockchain and crypto projects are being cautious, especially in the USA. He said that: “It seems like even well-funded projects here are being super-cautious, and investors are mainly looking for bitcoin algorithm funds and DeFi (Decentralised Finance) to get interested.”
However, as the expert pointed out, ICOs are going to suffer the most, taking them to an eventual halt. “But it’s going to take a lot to get the market for new token issuances back to life – ICO Bench’s latest report literally said something to the effect that after $27 billion raised, the ICO may now be effectively dead.”
“Well, it will be enough to say that the ICO & IEO market is on its last breath. Even during the last two weeks of January, less than a $1M was raised, that is totally horrifying about the market that used to raise tens of millions weekly. Thus, January has set the historically lowest bar in funds raised with its $21M and 6 projects who have raised any funds. So, there is a strong signal that the market is not rehabilitating yet and, moreover, turning almost flat. Thus to remember terrifying January, there were 105 ongoing projects where 53 were already completed and only 2 projects have raised funds during the last week. Being honest, these numbers are going in descending order as the train goes down the hill,” Terpin added.
However, Mr Terpin still shows optimism regarding a potential comeback for the ICO market. He thinks that there are two or three things that can bring it back, as it has happened in the past that a similar death announcement took place in 2015 when it was hard to raise even $100k in a token sale when BTC was USD $250.
The most important reason is if the current Chairman of the U.S. Securities and Exchange Commission Jay Clayton leaves (he is rumoured to be going back to private industry at the end of this term), and if Hester Peirce becomes the new commissioner, she may be able to get her Safe Harbor Act passed. This would give tokens three years to prove they are useful and/or decentralized.
“This alone would allow Americans to buy tokens, and the rest of the Western World tends to follow. My thinking is that if something isn’t a scam (same anti-fraud, bad actor, OFAC rules apply – they don’t presume most Silicon Valley cloud startups are scams just because 95 per cent fail) – and coming off a historic jobless claims report (3.3 million people filed for unemployment last week, exponentially higher than the peak of the 2008-09 “great recession”). I’d think the government would like to see its own citizens who are sitting on zero-interest cash be free to spend it in what they feel are high-risk/high-reward investments.”
Likewise, Terpin stated that what might be more significant than the three-year Safe Harbor Act: “…is the proposed – and likely to pass – SEC expansion of Reg CF from $1m to $5m. This lets anyone invest in a startup – not much, but you don’t have to be accredited – it used to be the lesser of 5 per cent of your annual income or 5 per cent of your net worth; now it will be the greater of the two so that someone who has a trust fund of just under $1 mm (if it’s over, you’re accredited) can pump $40k a year or so into a diversified portfolio of angel investments.”
“Most significant will be the eventual return of bitcoin prices to new a new All Time High (ATH) in 2021-22… if it doesn’t, then the stock-to-flow dynamics are broken.”
“When BTC and especially ETH go up, new projects tend to get funded by people to hold those tokens – they’re the early contributors who build the blockchains and then you’ll see a new crop of funds pop up. Right now ALL funds seem to be algorithmic trading funds, but if you get another 100x token in the next five years, we are back. If not, then we are left with things like NFTs, which is fine but not as compelling – although NFTs can be built on new blockchains too. It’s all about what the millennials and Gen z’s consider to be the new killer app they’re willing to buy.”
Terpin forecasts that after this act is passed, they will never call it an ICO again, but just like the dotcom frenzy crashed and there were a couple of years you couldn’t fund a consumer internet company… then Google and Facebook roared back in 2004 and led a new wave of consumer internet companies – they just didn’t call them dotcoms.
Michael Terpin is the CEO of Transform Group, whose divisions include Transform PR, a global public relations firm whose 200 clients have included Augur, Bancor, Dent, Ethereum, Neo and OKEx; CoinAgenda, a global event series for cryptocurrency investors, and Transform Strategies. Transform Group is based in San Juan, PR, with offices in Santa Monica, Las Vegas, Silicon Valley, NYC, and Toronto. Transform Group also owns a blockchain incubator/accelerator in Hamilton, Bermuda. Terpin also co-founded BitAngels, the world’s first angel network for digital currency startups, in May 2013.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.