Study:Most of Quarter 2 ICO Launches Ended in Failure
More than half of all initial coin offering (ICO) projects were unable to finish their crowdfunding during the second quarter of 2018, according to cryptocurrency data firm ICORating in its recent report.
The independent ICO analysis portal discovered that 55 percent of the ICOs were disastrous in Q2 2018. That is over 5 percent of the failed ICO projects recorded in Q1 2018. However, funds continued to enter in the ICO projects as a whole, increasing from $3.3 billion during the first quarter of 2018 to $8.3 billion in the second.
Taking the lead as failure were ICOs that offered service and utility tokens. ICORating noted that “emission conditions, token type, and metrics had [an] indirect effect on fundraising success,” signifying that not all the failed ICOs did so as a result of poor quality.
There were many grave inconsistencies that led ICORating to reach the conclusion that “the overall quality of projects has significantly worsened.” It is claimed that a small number of projects made an average of $50 million per project, while the unsuccessful ones were unable to go attract anything above $100,000 in investments.
The report cited PumaPay, a reasonably-simple cryptocurrency payment and billing solution was able to single-handedly make $117 million in May 2018.
The research also discovered that 57 percent of the overall ICOs were expected to raise funds at the initial stage. However, these projects made the lowest amount of funding on average.
The report further pointed out that:
“The highest percentage of unsuccessful ICOs in terms of product readiness arose from projects at the idea stage. 58% of such projects failed to raise more than half a million dollars.”
As an alternative, many investors were interested in participating in projects that had an available minimum viable product (MVP). Those ICOs made as much a $34.5 million on average in crowdfunding.
The most known industries based in the amount invested during the Q2 were finance and blockchain. EOS, the blockchain software platform attracted $4 billion in the past year, while PumaPay, a finance sector project was one of the most successful ICOs in Q2.
