How does Telegram members count impact the ICO investment returns?
Have you heard about ICO (Initial Coin Offering)? It is a process of creating new cryptocurrency, mainly to fund a new company or project. People that participate in ICOs are doing this because of two reasons:
- they are fascinated with new technology that new project will develop
- they hope that they invest in ‘next bitcoin’ cryptocurrency, which of course means huge returns on investment
I’m not sure which from these two reasons are the most important, maybe mix of them: tech & money :) Anyway, investing in ICO can be very exciting!
Nowadays, there are tons of ICOs. How to select the ICO that will give good return on investment? This is the question, that many is asking. Of course, our favourite way is data-driven! Recently, I wrote the article how machine learning can be used to predict potential ICO returns. In this post and next articles I would like to examine what are the main factors that make ICO an attractive for investors.
Let’s check how Telegram members count impacts the returns
The Telegram chat is one of the most popular social channel for projects doing ICO. I have collected a list of ICOs available at icodrops.com and for each I’ve checked the members count on telegram channels. Below are my findings.
I have collected 290 ICOs with telegram account (data collected on 28th, March, 2018). From them, 168 ICOs were listed on coinmarketcap.com so the All-Time-High (ATH) return can be computed. (Keep in mind that I’m using here ATH return, so it is return computed for the highest price from coinmarketcap.com divided by ICO price). Let’s check what is the distribution of Telegram counts for ICOs:
The average number of members in Telegram channels is 13,077 per ICO, and the median is 8,632. There is long tail in this distribution. The 84.5% of all ICOs have below 20k members at their Telegram groups.
Let’s take a look at returns distribution. The returns are computed by dividing ATH price by ICO price, the ROI is computed in USD.
It is also distribution with long tail. The average return is 9.6x and the median return is 4.54x. The 11.9% ICOs have return over 20x. If you will invest in every ICO(*), then every ninth will give you over 20x return. Amazing! (* the ICO needs to be listed in icodrops.com, have telegram channel, and needs to be listed on coinmarketcap after ICO).
OK, and how members count on Telegram channel impacts the ICO returns? I have built a 2D histogram (returns vs Telegram members count) to show this dependency.
From the above table you can observe, that ICOs with highest returns do not have the highest counts of members on their Telegram channels!
Let’s do one more check. Let’s take all ICOs with number of Telegram members higher than average. What is their mean return? It is 9.38x, while average return of all ICOs is 9.6x.
What is the average number of Telegram members for ICOs with over 20x ROI? … it is 13,200 members!
From above I conclude, that highest number of Telegram members doesn’t mean that the returns will be the highest.
In the next posts, I will try to check how other factors impact ICO investment performance. I think the hardest question is ‘when the moon?’ but I will try to search the answer for it with data-driven approach! Stay tuned :)
Our automatic machine learning service: MLJAR
Disclaimer: I take no responsibility or liability for any losses which may be incurred by any person or persons using the whole or part of the contents of this article. It is not financial advice! It is not investment advice!
