Binance Labs Wants ICO Bubble to Burst, Says Valuations are ‘High and Unreasonable’
It looks like Binance’s new $1 billion fund to support startups may get off to a slow start.
“We’d like the bubble to break,” the head of Binance Labs Ella Zhang told Bloomberg. “We still see a lot of hype in the market; valuations are high and unreasonable. We really think if the bubble bursts, it’s a good thing for the industry.”
The creation of the investment fund, Binance Labs, was announced a few days ago. It followed a recent blog post from Binance CEO Changpeng Zhao, who defended ICOs and their potential advantages over traditional ways of raising capital.
Zhang says the best cryptocurrency and blockchain startups will emerge if and when the initial coin offering (ICO) bubble bursts. She told Bloomberg that the average investment will be between $1 million and $10 million, in exchange for tokens and equity.
Binance Labs plans to focus its investments on specific areas of blockchain technology, such as decentralized exchanges, payment platforms and stable coins.
Data compiled by CoinDesk shows ICOs have raised more than $9 billion this year, which higher than the amount raised in all of 2017.