The new report of the ICORating portal on the state of the industry of initial coin offers (ICO) for the third quarter of 2018 states that the market shows signs of general disappointment in traditional ICOs as in the method of venture financing.
According to the authors of the report , the key characteristics of the period from July to September were general disappointment in the concept of traditional ICOs, the proliferation of security tokens, stricter regulation, and a decrease in capitalization of high-profile projects launched in 2017 and 2018.
Among the reasons that led to this state of affairs are the significant drop in profitability for ICO participants, which has become more acute the problem of weak project transparency, a general decline in the market, more informed decisions of investors, actions of regulators, and the lack of new ideas among teams.
The situation is complicated by the spread of fraudulent or simply dubious projects, as well as restrictions for US residents, who, in the light of recent actions of the Securities and Exchange Commission (SEC), are few who can be ignored.
The report included an analysis of 597 projects that completed their ICOs over a specified period. In total, they managed to collect $ 1,819,585,090. For comparison, in the second quarter, ICO projects collected $ 8,359,976,282. It is noteworthy that 57% of projects failed collect more than $ 100,000, and only 4% ended up on the stock exchange (7% in the second quarter). The average amount of funds raised among the most successful projects was $ 33 million.
It is noteworthy that the positive values of the return on investment showed only projects from the marketing and advertising industry. Investors in other industries suffered losses – the largest of them fell in the area of asset management.
The report also says that 76.15% of startups that attracted funding through ICO were armed only with an idea, not having a functional product. Compared with the second quarter, this figure increased by 18.72%. The same category of projects was the least successful –72% of startups collected no more than $ 500,000.
Note that during the reporting period, 63 ICO with Russian roots raised $ 182.9 million – the highest value among all countries, but a large number of projects did not allow Russian teams to become leaders in the average amount of funds raised. The most effective from this point of view were startups from Spain and Singapore.
Earlier it was reported that, under pressure from the SEC, Airfox and Paragon projects will register their tokens as securities.
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