The popular fundraising tool may well evolve into something different as the cryptocurrency market develops.

Are cryptocurrencies and Initial Coin Offerings (ICOs) going the way of the dot-com bubble?

Bitcoin’s price has tumbled, recently trading below $8,000, near where it traded last October and November. Ethereum and Litecoin, two other popular cryptocurrencies, have also come back down to earth, trading at late-2017 levels.

The meteoric rise of ICOs — a play on the equity market’s “IPO” terminology and a means of crowdfunding the development and sale of a new crypto token — has been astonishing. According to Crunchbase, in Q1 2017, just seven ICOs raised a total of $28 million, but by Q4, more than 100 ICOs raised almost $3 billion. All told in 2017, ICOs raised almost $5 billion.

And the SEC has stepped in to investigate, warning investors through an open letter from SEC Chairman Jay Clayton in December that ICOs “must be accompanied by the important disclosures, processes and other investor protections that our securities laws require.”

Many crypto investors are concerned that the SEC will become involved in the ICO market. TheStreet reported that the SEC has issued subpoenas asking companies for information about their ICOs but so far, no one has disclosed exactly what the SEC is asking for. These developments have weighed on the market in 2018.

“The flurry of ICOs reminds me of raising money in the 1990s where we just replaced the slide decks and white papers, but the idea of companies being able to raise money through an ICO is exciting,” said Franck Nouyrigat, a crypto investor and founder of the popular tech-startup boot camp, Startup Weekend. “This new form of fund-raising unleashes a true crowdsourced investment, where many different parties can participate — vendors, individuals, customers, etc. In just one year, ICOs have become the cutting edge capital investment tool — venture capital funding feels more like an insurance company now.”

Can this new form of investing through blockchain and cryptocurrency succeed, even with the SEC involved? It feels like it can. The times are different and the SEC has likely learned — and hopefully we have, too — from the past mistakes and exuberance of the dot-com bubble, as well as the financial collapse of 2008.

But why is it different now? “The underlying technology of cryptocurrencies, blockchain, is broadly applicable to basically any asset in the world,” said Alex Tapscott, co-author of “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money Business and the World.” “In dollars raised, the next five years will make the first wave of ICOs look like kid’s stuff. Regulators are clamping down, but they really have no choice.”

Tapscott believes the industry urgently needs some regulation to not only protect investors, but also thwart fraudsters and create measures to hold them accountable. “To continue investing and building in this technology, market participants need to understand the rules of the road,” he said.

Toby Lewis, the CEO of Novum Insights, a cryptocurrency market research and data provider, agrees with the potential of ICO funding. “The ICO has become a great mode of crowdfunding, blending investment returns to the possibility of accessing a product. Unfortunately, much of the interest has been speculative to date, so the investment side has been in the driving seat. Yet, over time this radical blend will see huge innovation.”

Lewis thinks many ICOs will need to be registered as securities. That move will increase costs and remove much of the Wild West mentality of the ICO market. “This is reasonable on the part of the regulators, as many ICOs without functioning products should be deemed securities.”

To move the ICO investing market forward, Tapscott predicts the substitution of a new offering pioneered by Polymath known as the security token offering (STO). The STO is an ambitious project that integrates financial services into blockchain technology and incorporates the properties of regulatory compliance into each token. Tapscott says the STO will not just be a connection to the blockchain representing some off-chain asset, but instead be a native digital asset that can be traded peer-to-peer without custodians, clearinghouses, brokers, exchanges, and banks.

“ICOs have already upended venture capital [and] Wall Street could be next,” Tapscott said. “These offspring of ICOs, Security Token Offerings (STOs), will become ubiquitous in venture capital and financial services more generally.”

What does the average investor do? Chad Bennett, founder and CEO of blockchain-based cybersecurity firm HEROIC.com says the investing principles will be very similar to other forms of investing, even though the methods will be different.

“Ensure that you have a solid knowledge of the team and its accomplishments, and understand the legal structure of any given token sale,” Bennett said. “Be willing to be in it for the long-term — it will take time to develop the market. Don’t bank on getting a huge return in just a few days.”