In case you didn’t already know, the vast majority of ICOs have failed.
The latest issue of Diar — a newsletter which “provides concise coverage and analysis of significant developments within the global digital currency industry” — has found that Initial Coin Offerings (ICOs) are raising more money this year.
However, 70 percent of tokens are now worth less than they were during their ICO phase.
Notes Diar‘s Volume 2 Issue 38 issue:
While Initial Coin Offerings (ICOs) have to date raised double in 2018 what they did last year, the controversial fund-raising vehicle is seeing its popularity diminish to select projects. Diar number crunching shows that 70% of tokens are now valued at less than what was raised during their ICO. And with tokens having no equity representation, markets have shrugged off cash-on-hand as part of an enterprise valuation.
A New Low
The broad statement that ‘ICOs are dead’ is being thrown around a lot lately. If you’re not convinced, however, TokenData’s public ICO statistics — as noted by Diar — “saw the number of projects successfully completing a fund-raising round hitting a one year low” last month.
TokenData’s founder, Ricky Tan, told the newsletter that 2018 will probably not see a significant increase in public ICOs and pre-sales.
‘Eye Watering’ Losses
Still not convinced that ICOs are dead?
The numbers speak for themselves.
As noted by Diar:
Outside the Top 100 cryptocurrencies being traded, there is a $5 Billion shortfall against the total amount raised during an ICO for the 562 tokens with reliable information about their fund-raising. 7 out of 10 tokens that are sitting below the screen fold have valuations that are now under their initial raise.
The story is quite telling when accounting only for the tokens that are below the funding teams received. 402 out of 562 projects that raised over $8.2Bn are now worth $2.2Bn – an eye watering $6Bn loss in market capitalization value against actual cash paid out to development teams.
What do you think about the failure rate for ICOs? Let us know your thoughts in the comments below!
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