Altcoin News: At Least 89% of ICOs Turned out to Be Unprofitable, but Winners Won Big
August 8, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
Analysts at The Block decided to return to the past and dive into the ICO mania that was raging at the turn of 2017–2018.
“It’s now obvious that ICOs were a massive bubble that’s unlikely to ever see a recovery,” they wrote.
The median ICO “yield” in US dollars today is -87% and is constantly falling.
The authors explain the failure of the ICO concept by the discrepancy between the interests of investors and founders. In contrast to venture capital financing, the founders raised funds from inexperienced, mainly retail investors, having a product that was at a very early stage of development. ICO investors did not have any rights to project assets.
ICO statistics vary depending on which source to contact. According to the highest estimates, over 5,600 ICOs were conducted, during which $64.5 billion was collected. The most conservative estimate is $14 billion.
It is noteworthy that all sources agree that the peak of the ICO came in December 2017, after which the trend has begun to decline.
The profitability of ICOs is even more difficult to evaluate since many projects have already ceased to exist or have completely illiquid tokens.
The number of ICO campaigns in time corresponds to the amount of funds raised by them. Most ICOs finished attracting financing in December 2017 and January 2018.
The average amount of capital raised by one ICO in this sample is $36.2 million, median — $18 million, total — $14 billion.
Only 10.8% of ICOs have a positive return in US dollars. The real value can be significantly lower, since not all ICOs were taken into account — many of them simply ceased to exist. 11 ICOs showed returns of over 1,000%.
30 ICOs (7.7%) exceeded Bitcoin in terms of profitability. Over 94% of the ICO lost to Bitcoin more than 90%. The median return on Bitcoin is -91%.
Five best ICOs in terms of growth to Bitcoin:
- BNB (5 902%)
- IOTA (1,744%)
- Ethereum (1,339%)
- Lambda (962%)
- ChainLink (668%)
The best ICOs in relation to the US dollar:
“Considering that a minimum of 89% of all ICOs have a negative USD return and that IEOs are starting to manifest the same trend, it’s safe to say that the vast majority of all ICOs can’t hold value over the long term. That being said, the winners still tend to win big,” concludes the analyst.
Author: Marko Vidrih
Images credit: The Block
