By September, Forbes reported that almost $2.3 billion had been raised through ICOs, most of that being raised in the first half of 2017. The funds raised through these ICOs is directly proportional to the price of Ethereum in 2017. So, how do ICOs influence the price of Ethereum?
To answer this question, we must go back to the basic structure of an ICO. Fundamentally, an ICO is just a way for a startup to raise capital for their company and/or project. Instead of looking for institutional investment, they could opt to source capital from individuals, an ICO. It goes like this – the startup tells the public what it intends to create, and it offers tokens to those who provide funding. Unlike an IPO, however, these tokens do not always represent equity in the company, but rather access to the company’s services.