Nearly half of all ICOs ´s have failed in 2017, according to Fortune. If you extend the selection criteria and count the ICOs, which are on the brink of collapse, then we would already be at 59 percent. We call “semi-failed” projects in which the founders have disappeared from the radar or there is no longer any interest on the part of the community. Together, investors have lost around $233 million to ICOs in 2017.
The ICO Review
The ICO madness began in early 2017 when the price of Bitcoin and other digital currencies began to rise gradually. Blockchain projects use the ICO method by offering their own tokens for sale. The first ICO was Mastercoin in 2013 but the most famous project to date was Ethereum. Ethereum generated about $18 million for the development of the software.
Ethereum Code and other Mastercoins
There are a number of projects that used this funding Ethereum Code method and generated a lot of capital. We have briefly compared the ICO projects with the largest “capital contributions”. We do not include the current Telegram case. Although it has already generated over $ 800 million, this cannot yet be described as a public ICO, as the capital so far comes from selected companies and investors, a private ICO so to speak. But now to the ICO projects:
Filecoin > $ 250 million
Tezos > $230 million
EOS > $ 180 million
These massive ICO financing rounds resulted in a total investment of an incredible $5.6 billion in 2017. In contrast, traditional venture capitalists generated $1 billion for blockchain startups.
Traditional vs ICOs – Failing Rate
Considering that three quarters of all traditional start-up companies fail, the 50 percent of ICOs don’t sound so bad at all. However, the problem here was time consuming, because the ICO madness actually only took place in the last six months. This means that almost half of all projects failed after just a few months. A really gloomy picture.
But if you look at the average ICO, including the failing rate, it generates 12.8 x of the invested capital. That doesn’t sound bad for the first time, but with the large number of ICOs it is difficult to decide on a promising project. Above all, you have to be aware that all projects sound good in theory. That’s why it’s so important to do good research and form an opinion.