The biggest thing that happened in the crypto world was the rise of the ICO. Anyone with an idea could release a token and use it to raise funds.
But what the ICO presented was the hope that just about anyone could be involved in both soliciting and investing in an enterprise. It seemed too good, to be true.
This year, things have changed. The headline reads “The ICO Market Has Hit the Brakes.”
And here is the data from ICOrating.com:
- Only 7% of ICOs from Q2 have been able to secure listings;
- 55% of all ICOs from this period failed to hit their funding target;
- 15% of projects already had a working business, versus 6% in Q1, and whether or not this was the case had no effect on fundraising ICO success.
So even if the ICO market currently seems a little stalled, this won’t be the case in the long run. But in just one year, the market has doubled, raising $11,690,981,663 of investments which is 10 times bigger than the cumulative sum of investments from ICOs of Q1-2 2017. Excluding EOS, the cumulative amount of funding received from ICOs of Q1-2 2018 is 6.4 times bigger than the one of Q1-2 2017.
The total amount raised in the second quarter of 2018 is $8.4 billion dollars. Now, does that seem like a dead market to you? And even though the new ICOs in the second quarter haven’t been able to raise $100,000 in funding. This could indicate a downgrade in the quality of listings.
And in a market in which ANYONE can participate, it’s no wonder that only 7% of new tokens manage to obtain a listing on established crypto exchanges. But, this is not the sole reason for that, naturally. And even those who follow changes in the ecosystem, can’t keep up with the volume, variety, and frequency of listings.
The report states that 55% of all ICOs in Q2 2018 failed to complete crowdfunding. Which is only a 5% more than the Q1, and this happened in the time of serious pullback in the markets. What should also be noted is that there was an 11% increase in the number of projects that chose this way of funding.
The report also states:
’’On average, the top projects for Q2 raised 50 million USD. Only 3 mentioned projects attracted all their funds in the course of 1 day. On average, these projects raised their money within 63 days (the average campaign duration time is the same as in Q1, but there is an evident tendency for an increase, at least by 10%). Compared with Q1, the number of projects offering tokens with service characteristics decreased by 24%. The share of projects that offer security tokens decreased by 8%. The number of projects with utility tokens increased by 32%.’’
And what about crypto-utopias? North America is still the most favorable country for the ICO, with 64.75 of all funding attached. Singapore took second place, followed by the UK and Switzerland. Asia had an increase in the funding, but a decrease in the number of projects.
But when it came down to the number of business registration of high-value tokens, Malta, Giblartar, and Singapore took the first three places. The report states:
“We attribute this to an openness to blockchain projects and the legal changes enacted by financial authorities in Malta and Gibraltar. Keep in mind that all this happened despite true setbacks in the markets as a whole. The median return on tokens in the second quarter was a dismal -55%. The average number of investors per token was 7,871, showing what a truly thin market we are really talking about. The great exceptions to the general pattern were Telegram (a communications platform) and EOS, which sports a new governance model for decentralized applications.’’
The least successful ICOs were cryptocurrencies. However, there were other industries that brought a lot of money to the world of blockchain:
“Following Q1 trends, the most popular industries with the largest number of projects were finance, gaming, and infrastructure. The number of gaming projects doubled compared with Q1.”
All in all, the report shows that we are yet to experience the full capacity of the world of the blockchain. Just because this quarter wasn’t as good as the previous one, it doesn’t necessarily mean that the ICOs are finished. Just remember how long it took for the people to fully embrace the railroads, or any other novelty, for that matter. All good things take time, and ICOs are our railroads. Our future.