A new study, published on 15th of November, by the independent research group ICO Rating gives insights on the latest coin projects. In toto, the research reveals that the months between July and September were not so successful for the ICO (Initial Coin Offering) initiatives than the two previous quarters of 2018. The summary says that:
Q3 2018 was not as successful as Q2 and Q1 of 2018 for ICOs. Regardless of the high risks inherent in ICO investing, many fraudulent projects and an overall bearish trend in the market, investments continued.
The total amount raised by ICOs was $1,819,585,090 USD. This is significantly less compared to the previous quarter when funded ICOs reached 8,359,976,282 – almost 7 times more. However, despite the bearish predictions lately, there were nearly 600 projects launched in Q3. But, sadly, 57% could not collect more than $100,000 USD. And only the modest number of 4% of all ICOs managed to get listed on cryptocurrency exchanges.
Why was there a fall in investments?
Perhaps the reason for the smaller funding is the business proposal that backs up these projects. According to ICO Rating’s report, 76,15% of the offerings had nothing behind them but an idea. This is not such a shock, compared to Q2, because the difference is with only 18% more idealistic kind of offerings. However, this summer we saw a huge lack of transparency, too. 82.17% of the ICOs used closed-source code instead of an open-source one. And their statistics say open-source projects are more successful in general, 69.42% of the ICOs which did not expose their developing process on GitHub could not attract investors.
Where the ICOs were launched?
Geographically speaking, it is interesting to note that almost half of the recent ICOs were launched in Europe – 43%. The funds stayed in Europe though, because 48% were raised there, too. The second place goes to Asia, with almost 20% of ICO gained funds, the third one is for various countries worldwide, and North America comes fourth with about 12% of ICO crowdfunds.
What were the ICOs for?
The offerings in Q3 stood primarily for financial services which gained more than $120 million followed by blockchain infrastructure and wallets, also quite successful. Per ICO Rating, the surprise for this quarter is the listing of Drugs and Healthcare industries in the ICO ranking which has not been so popular by now. Moreover, service tokens certainly ruled the market whereas the utility ones have backed up substantially.
The Ethereum platform kept the monopole again in Q3. 83.75% of all token sales were made on the Ethereum platform and the other percentage is divided between smaller systems such as NEO, Stellar and Waves.
86.13% of the projects aimed to create a Dapp or a decentralized application. Unfortunately, even with the strong hype around all kinds of applications in recent years, 67% of all Dapps ICOs were not successful.
Which are the successful ICOs?
So, after the long negative list with ICO which did not manage to break through, let us see the good examples. Unsurprisingly, EOS holds the number one in raised funds. EOS is a platform, operation-system like and a cryptocurrency with more than $3 billion market capitalization already. Among others are TaTaTu, the decentralized entertainment platform, Bankera, Telegram, the crypto exchange Huobi, and Environ. The latter is a Swiss-based energy startup we recommended as a promising green ICO project some time ago.
CryptoFrog will continue to monitor the ICO market and to deliver live information. After all fraudulent activities, let’s hope that the market will finally re-organize and consolidate.