Since 2013 crypto space has seen ICOs being used more and more for funding the development and operations of new crypto companies and projects. While the ICO industry is still relatively new, there have been numerous studies about ICOs and ICO investing that might be a bit surprising. In this post we have listed some lessons to remember regarding recent ICO studies. Let’s see what we can learn from them:
Only 50% of ICOs were able to raise more than 100k usd during Q1 2018
Typical hard caps, which act as upper fundraising targets of ICOs, would range from 10m usd to 40m usd with some ICOs falling below this scale and a few having hard caps exceeding the 40m usd by far. Compared to these numbers, the public sale funding success is clearly subpar for most of the ICOs, if the average target is to raise between 10-40m usd. Based on this observation it seems there is simply not enough new capital flowing in to the ICO market for projects to fill their fundraising targets.
Q3 2018 started strong for ICO funding numbers with 1.5bn usd raised in July, but saw a quick decline during August with 326m usd raised
While we saw the peak of ICO funding in January 2018 for 3.07bn usd, the numbers of July 2018 indicated a positive start for the second half of 2018. However, the total funds raised in August was lower than any month since May 2017, when ICOs had not yet established a strong position as fundraising vehicles. Ethereum price has been following monthly ICO raising totals, and compared to the ATH price of 1.4k usd ETH has not been doing well lately with current price hovering around 200 usd.
The survival rate of 2017 ICOs was only 54% already in the beginning of 2018
In February 2018 news.bitcoin.com did an extensive study of ICOs conducted in 2017 during, and found out only 54% of them had survived as companies - the other half or 46% were effectively dead projects with no future ahead. Close to 16% of the 2017 ICOs failed already during the fundraising stage, and 30% have either taken the money and disappeared or slowly faded away with no further progress of the project. In addition to the 46% of 2017 ICOs that didn’t survive, another 12% have had teams stopped communicating on social media or lost the majority of their community. Together these findings and low success of ICO fundraising in 2018 doesn’t look very promising for either ICO founder or investors in 2018, leading to us to the next lesson which is not so surprising:
According to ICO_Analytics, only 8 ICOs in 2018 have returns greater than 1.5x measured in usd
Compared to the great returns of ICOs last year, the returns of 2018 ICOs have been significantly lower. According to ICO_Analytics there have been only 8 ICOs with 1.5x or greater return in usd: Tomocoin, Mainframe, Iotex, Odem, QuarkChain, Holo, Zilliqa and Ontology. As the number of ICOs in 2018 has already passed the number in 2017, there are hundreds of ICOs experiencing difficulties in growth of their token price after exchange listings.