Virtual currency sales ballooned to $9.1 billion so far this year, exceeding the $6.6 billion total for all of 2017, a financial technology data provider reported on Monday, but it said the monthly trend actually showed a slowdown if the two biggest offerings are excluded.
Digital technology startups around the world have raised funds by selling cryptocurrencies, or tokens, that sidestep banks or venture capital firms as intermediaries.
Financial technology provider Autonomous NEXT reported the $9.1 billion figure, noting that the total includes token sale offerings of Telegram, a messaging service founded by Russia-born entrepreneurs Pavel and Nikolai Durov in 2013, and Block.one's EOS currency.
Telegram raised $1.8 billion early this year, while EOS raised about $4 billion in a token sale over a one-year period, starting in June 2017.
If the Telegram and EOS sales were excluded, Autonomous NEXT said, the monthly figure was lower at $560 million so far this year from a high of $1.5 billion in December 2017.
Market participants said the EOS sale skewed the numbers significantly because of the method of accounting. EOS had a one-year sale period, unlike other token offerings.
"Unless you believe in the continued presence of mega deals, token offerings have indeed been dragging due to continued regulatory uncertainty, tax overhang, and a lack of tangible progress in software adoption by the mainstream consumer," Autonomous NEXT said in its report.
Regulators around the world, led by the U.S. Securities and Exchange Commission, have issued rules or guidelines that are giving investors pause and delaying new offerings.
The SEC, for instance, has cracked down on companies that have fraudulently solicited funds from investors claiming to invest the cash in virtual currencies or initial coin offerings (ICOs), and sent several subpoenas to companies that raised large amounts of cash.
Still, Autonomous NEXT said it believes the regulatory uncertainty will get resolved.
"Even if Western regulators constrict the space into a narrow box, there are many legitimate jurisdictions that want to be crypto Delaware," said the data provider, referring to the U.S. state which has become a friendly jurisdiction for cyrptocurrencies.
It noted that many of last year's token projects were built by start-ups. This year, more mid-stage companies with 50 to 250 employees are tokenising some assets of their operations.
"Next year, the market could see late-stage companies bringing their own...projects to the market and marrying them with public crypto," Autonomous NEXT said.