'Recent ICO Flood Is Overvalued': Brian Kelly

Leading cryptocurrency investor Brian Kelly has stated that though a large number of initial coin offerings (ICO) continue to inundate the crypto universe, the market remains overvalued, reports CNBC.

There have been a flurry of ICOs hitting the cryptocurrency market in recent months. There have been more than 300 ICOs launched during the first half of this year, which is almost the same number of ICOs launched in all of 2017. Kelly believes that investors are in a "wait-and-see mode," instead of jumping on the bandwagon, which used to be the case.

He opines that investors already have a sufficient number of ICOs, and the space is getting saturated. "People are starting to say, 'I'm going to put the brakes on the ICOs right now. I've got my portfolio. I don't need a seventh or eighth ICO.'" Citing the saturation creeping in about investing in ICOs, the leading cryptocurrency investor told CNBC on Thursday that ICOs appear to be losing their sheen: "To me, [ICOs are] not as hot as they used to be."

Despite most of the ICOs being dollar-denominated, the U.S. is not the biggest player in the cryptocurrency fund raising market. Asian nations lead the way for ICO launches, especially those where regulations are not much of a concern. Another observation by Kelly is that a lot of the new ICOs are being funded with U.S. dollars instead of being funded by other popular cryptocurrencies like bitcoin or ethereum.

Popularly known as a bitcoin bull, Kelly is the CEO and founder of BKCM and a CNBC contributor. He has recently launched a new actively managed blockchain startup-based exchange-traded fund (ETF) called the REX BKCM ETF (BKC). (See also: Brian Kelly Launches Blockchain ETF.)

Volatile Market Leading to Lackluster Participation?

A lot has changed over the last six months.

The most popular cryptocurrency, bitcoin, which touched a record high of almost $20,000 in December last year, has fallen to around $6,700 in recent weeks. Other popular cryptocurrencies have seen a similar fate. The big decline was accompanied by wide swings, which raised questions about the previous year's cryptocurrency mania being a market craze, and whether small investors can really expect steady returns from an asset class that largely remains unregulated and susceptible to high volatility. (See also: Why Is Bitcoin's Value So Volatile?)

Lingering questions over tax liabilities for cryptocurrencies are also spoiling the vibe. Individuals are worried about the tax implications for their crypto holdings and past profits. (See also: How Cryptocurrency Taxes Affect Bitcoin Price.)

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