Our recent article on the Spray-and-Pray ICO investment strategy which dealt with ICOs that first surfaced in 2016 and their subsequent performance attracted quite a lot of interest. What’s more…
Our recent article on the Spray-and-Pray ICO investment strategy which dealt with ICOs that first surfaced in 2016 and their subsequent performance attracted quite a lot of interest. What’s more, quite a few readers reached out to us directly to criticise our methodology.
We would just like to re-iterate that, within that particular article, we did stress that we were basing our methodology on certain assumptions and we did point out within the text itself that we were aware that those assumptions could be called into question.
We stated, for example, that the exchange-entry price of a token – for the purposes of our performance calculations – was taken as reasonably approximate to the value of the token as sold during the ICO sale itself. We know, of course, that this isn’t always true.
However, some readers pointed out – perhaps quite legitimately – that we may have understated another assumption. Again, within that same article, we stated:
Past ICO general performance cannot be assumed to be an indicator of future performance – particularly now in 2017 where it seems that we are being flooded with opportunistic token issues which are likely going to inflate the number of dud token investments
“The sheer numbers of ICOs that are now emerging points to what is likely a serious decline in the number of legitimate business models as a proportion of the overall number,” one reader told us. “Check the stats.“
ICOs Running Amok?
We followed up with our reader for her source on the numbers. However, no reply came and so we decided then that it was worth checking the numbers for ourselves.
As any regular spectator of the ICO phenomenon can tell you, at the time of writing (October 2017) there are no regulatory frameworks in place anywhere that allow us to keep a track of ICOs past or present. We did dig up, however, one particular online resource that claims to carry a comprehensive list of ICO projects.
Whilst we remain sceptical of the claim as no explanation is provided as to how this comprehensiveness has been achieved, we decided that we would nonetheless work from the assumption (another one, yes) that, even if the list is not quite as comprehensive as it might claim to be, it is likely that it may come close.
We decided then to perform a web-scrape of Smith and Crown’s listings both past and present for 2017 in order to perform a simple group statistic of the number of ICOs by month as per their initial sale dates.
The numbers, as you can see, speak for themselves. 2017, particularly its second half, was witness to the Big Bang of the ICO phenomenon that is now coming to define the cryptocurrency experiment. Some estimates are now estimating that the real figure of ICOs appearing is now hitting 10 per day.
This does indeed suggest that due diligence is needed now more than ever when researching your potential ICO investments. As ever, never invest more than you are prepared to lose and make sure that to follow our advice elsewhere on avoiding fraudulent ICOs. You may also want to check out some of our articles related to an ICO’s investability and potential value.