Buying and holding is a blood loss? The median rate of return on ICO is -87%

As of August 5, 2019, 204,303 ERC20 smart contracts were deployed on the Ethereum network, reaching another milestone for Ethereum. In the ICO boom of 17 and 18 years, ERC20 tokens have become the favorite financing method for many blockchain startups and project parties. Time has entered 2019, and the number of ICOs has been raised less and less. The facts tell us that a hundred times of riches is just a dream of Huang Qi, and it is a reality that the huge loss is zero. The data shows that in the US dollar, the median rate of return for the ICO project is staggering -87%, and it is still falling. In the case of BTC, the median rate of return is even more bleak, at -91%.


Denominated in US dollars, ICO's rate of return

Larry Cermak, Research Director of The Block, said on Twitter today that the motivational mismatch between founders and investors can be used to explain why ICO failed. Unlike venture capital, ICO founders raise funds from non-certified investors (primarily retail investors) through early stage products. ICO investors do not have any rights to the assets of the project.

In fact, different data sources have different statistics in ICO statistics. According to the highest estimate, ICObench's data shows that there are currently more than 5,600 ICO projects, raising a total of $64.5 billion. At the lowest estimate, the total amount raised is at least $14 billion. Interestingly, all data sources have consistently concluded on the ICO's historical trend: in terms of fundraising, the ICO boom peaked in December 2017 and has since declined.

ICO's rate of return data is more difficult to obtain. This is because most projects have been shut down, closed down, or the project's tokens have no liquidity at all. A total of 444 ICO/IEO projects were selected for this analysis, with the largest proportion of closures. The average ICO fundraising amounted to $36.2 million, with a median of $18 million. After all, there is a large amount of $4 billion in EOS, with a total fundraising of $14 billion.

According to the monthly classification, the distribution of the number of ICO projects is very similar to the distribution of funds raised. The number of ICO projects was the highest in December 2017 and January 2018.


ICO quantity is counted by time

In dollar terms, only 10.8% of the 444 projects have positive returns . If all items are counted, this ratio must be reduced. Therefore, the median rate of return is -87% in French currency. However, there are also some projects that have performed very well, with 11 projects with a return on legal currency of over 1000%. Ethereum topped the list with 74,430% of the US dollar. The list also includes BNB, NEO, Cosmos and other well-known projects.


If compared to Bitcoin, the data shows that 30 (7.7%) items outperformed Bitcoin . Tragically, more than 74% of projects have fallen more than 90% relative to BTC, and the median BTC returns are even more bleak -91% . The top five performers were BNB (5902%), IOTA (1744%), ETH (1339%), Lambda (962%), and ChainLink (668%).

Larry thinks:

“Considering that at least 89% of ICO projects are negative, IEO projects are beginning to show the same trend. It can be said that most ICO projects do not retain value for a long time. That is to say, the strong may continue to become stronger.”