The peak of using initial coin offering (ICO) as a method of raising funds for the development of startups was in 2017-2018. This year, the ICO development process has become less extensive compared to the huge amounts earned by project organizers in previous years. Analysts at The Block summed up the results of the ICO mania, which was played out at the turn of 2017-2018.
"It’s now obvious that ICOs were a massive bubble that's unlikely to ever see a recovery. The median ICO return in terms of USD is -87% and constantly dropping. Let's look at some data!" the analyst wrote on his Twitter.
As it became known, the median profitability of ICOs in US dollars to date is -87% and is constantly falling. Analysts explain the failure of the ICO concept by the discrepancy between the interests of investors and founders. Unlike venture financing, the founders raised funds from inexperienced, mostly 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 with investmetns reaching $64.5 billion. The lowest rate stands at $14 billion. It is noteworthy that surveyed parties agree that the peak of the ICO was recorded in December 2017, after which the trend started slackening.
The average amount of capital raised by one ICO 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.