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ICO research: As much as 60% ICOs managed to raise funds

ICO research

 

As much as 60% of ICOs launched during the month of March 2019 managed to raise funds for their projects, but albeit not the whole amount. But this itself is a monumental development for the Initial Coin Offering space, which has been down in the dumps lately. So why is this monumental? Because this could mean ICOs are not dying but instead struggling to find a foothold. 


Initial Coin Offerings- a brief history

The first token offering in history was launched way back in 2013 by Mastercoin. So ICOs are not a new phenomenon but they didn’t gain significant momentum till 2017 when there were quite literally hundreds of ICO launched every month. Thus began the ICO boom period, which witnessed more than 5000 ICO projects poped up across the globe.

# of ICOs by quarter

ICO research

source

But by mid-2018 the ICO spring quickly gave way to the ICO winter, with the number of ICOs dwindling to record lows. By Q1 2019, the number of ICOs dropped by over 72% YOY which lead many to believe that ICOs are a dying breed (source).


Are ICOs dead or just struggling to find a foothold?

ICO numbers have been plummeting since the year 2018. But does this necessarily mean ICOs are dead? This is where things get interesting. 

The whole point of launching an ICO is to raise funds through crowdfunding. But you may be surprised by how many ICOs actually raise funds, let alone reach their target amount.


Percentage of ICOs that raised funds

ICO research

In March of 2018, i.e during the ICO boom period, only 35% of ICOs launched during that time raised any funds. But just a year later, as much as 60% of ICOs managed to raise funds, which is an increase by 25%.

At an initial glance, both the trends being mentioned earlier seem to contradict each other. The first graph implies ICOs are a dying breed but the second one implies they are improving. So what’s the deal? 

Final thoughts on ICOs

Why are ICO numbers plummeting? This can be attributed to two main factors-

  • Investors, especially retail ones, are wary of ICO projects. But their skepticism is not misplaced, it’s actually spot on! The lack of regulation in the ICO space attracted several bad actors with malicious intent, which cost investors literally millions in ramifications. To sum it up, ICOs are not as popular as they used to be back in 2017.
  • Increased regulatory scrutiny. A major reason why ICOs gained popularity is because of the ease with which an ICO project can be launched. But now with increased regulatory oversight, especially in prime markets such as the US, entrepreneurs are finding it increasingly more difficult to launch an ICO.

So without a shred of doubt. ICO numbers are dwindling to measly levels. But this could be because fraudulent players in the space are being weeded out. It’s a simple case of the market correcting itself. Which explains the second graph.

As the fraud ICOs got weeded out, it allowed the remaining players to take the stage. For investors, this trend should come as a huge relief,

Why?

Because instead of being overwhelmed by the sheer number of ICO projects available, now they are presented with a relatively smaller number of competent projects. So it’s safe to say ICOs are not dead, they’ve just matured.

 

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