The likeliest scenario is that the two elephants in the room (US, EU) issue some sort of regulatory framework for ICOs and cryptoassets in general. I expect them to distinguish between pure network token or cryptocurrencies (which will likely include Bitcoin, Ethereum and some others) and security token. Almost all of the existing ICO space will firmly fall under the security token regulations. (Edit: SEC chairman Clayton: “I have yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security.”, Wall Street Journal Nov 9 2017)
As a result, all major exchanges that have any kind of human owners, developers or known actors will be mandated to de-list all of these security token with immediate effect and they will follow this order. As for decentralized exchanges, given the trade in these token will be illegal and the projects that sold them might well have to refund investors, I am not so sure these are the way out that solves everything. I actually hope they aren’t because regulatory certainty is a positive, not a negative.
When this happens, all ICOs will lose 90%+ of their value (just like during the .com bubble…) regardless of the strength of their projects. I keep bringing this up, but Amazon fell to 5.5 USD / share in 2001. It now trades at 1000 USD+. So also the good projects will fall 80–90%…
At the same time the utility token related to the ICO boom will probably crash in tandem (after potentially spiking as most people first sell their security token for utility token and then for bitcoin and then for fiat), but possibly not as deep and they will recover in time. Most of these are valuable technologies that nobody wants to harm in the long term. Cryptocurrencies such as Bitcoin will also be impacted, but I would expect an almost V-shaped recovery there as the listing of futures on the major exchanges, the formation of ETFs and more regulatory certainty will undoubtedly introduce institutional money to the space and more than 90% of that will flow into Bitcoin. Make no mistake though, Bitcoin will also suffer.