76% of This Year’s ICOs Are Already Under Water

2018 has been a tough year for the cryptocurrency markets, and crowdsales have borne the brunt of it. ICOs launching in the first quarter of this year have struggled to turn a profit, with the majority of exchange listed tokens trading at a loss, both in USD and ETH terms. As a consequence, pre-sales provide the only means of turning a profit – and even that’s a long shot.

76% of ICOs Are in the Red

At MIT Bitcoin Expo on Saturday, Christian Catalini claimed that “40% to 50% of ICOs are currently underwater – trading at a price lower than the initial offering price”. Having examined the data for 2018, using Tokendata and ICO Stats, news.Bitcoin.com can confirm this to be a reasonable estimate. In fact, 76% of 74 ICOs completed this year are in the red, posting an average dollar return of 0.9x. The 56 exchange listed ICOs that are trading at a loss have an average USD return of 0.45x. (ICO Stats calculates its ROI based on the token’s pre-sale price, rather than the public sale, so the average return for all 76 ICOs is in fact slightly lower than stated.)

Ethereum has dropped in value since the start of the year, reducing the average dollar return on every ICO to have launched on its network. Even if 2018’s losing ICOs are calculated in ETH terms, however, they are still trading at an average return of 0.9x. Whatever way the numbers are crunched, investing in ICOs is now an extremely risky business that’s statistically unlikely to produce a short-term profit…

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