Transaction Trends

An Initial Coin Offering (ICO) is a new fundraising mechanism commonly employed by FinTech and blockchain startup firms in which new projects sell percentages of a new cryptocurrency – called “tokens” – in exchange for legal tender or, most commonly, bitcoins.

If this is the first time you have heard about ICOs, you’re not alone. In fact, 75 percent of Americans are unaware of ICOs, a new report released Tuesday from online student loan marketplace platform LendEDU says. Perhaps unsurprisingly, despite their growing popularity as a quick means of fundraising for startups and profit generation for investors, only 24.9 percent of respondents had heard of the blockchain-based funding mechanism.

Even after respondents were exposed to an explanation of ICOs, 61 percent indicated they weren’t sure if they were legal in the United States, the survey found. Just under 20 percent believed ICOs to be illegal. In fact, ICOs are legal in the United States and are generally-speaking subject to fewer regulations than other fundraising processes. Naturally, those that knew more about ICOs were more likely to express interest in investing in them, the report said.

Although a previous LendEDU survey found Bitcoin – the world’s most valuable digital currency – found that 75 percent of Americans had heard of it, the survey found that second and third largest digital currencies in terms of market cap are much more obscure to the public. Only 32 percent of respondents had heard of Ethereum, the second largest by market cap, and only 22 percent had heard of Ripple, the third largest, the new survey found.

The survey was conducted via an online panel of 1,000 American adults from October 27, 2017 to October 30, 2017 by OnePoll. View the full report here.