The average ICO is much less likely to succeed now than it was compared to even a few months ago, according to new figures from TokenData quoted by CNBC.
In a bullish November that saw the top 10 cryptocurrencies climbing strongly on the back of Bitcoin’s breaking through the symbolic $10k mark for the first time, the average performance of ICOs appears to have taken another direction.
Early Year Optimism Hit By Bans
In the spring and summer of 2017, ICOs were brimming with optimism. 53% of all ICO ventures achieved their hard cap target in April. That figure rose to 57% for the month of June. Subsequently, however, there was a noticeable loss of momentum with the summer months of July and August showing results of 31% and 28% respectively.
By October, that figure fell further with only 17% of ICOs reaching hard-cap, likely a direct fallout from the Chinese and South Korean bans on ICOs. November also demonstrated a sluggish 23% as an ICO winter of discontent appears to have taken hold.
Scams Playing their Part
ICOs collectively had raised an impressive $3.6 billion up to the end of October. By the end of November, however, that figure had only increased to $3.7 billion.
A range of issues currently dogging the ICO scene are thought to be contributing to this apparent loss of confidence in the ICO model.
Organised pump and dump schemes are attracting the attention of authorities in the US, and a number of episodes, ranging from the Tezos lawsuit through to the NextBlock Global controversy, are contributing to a sense of general investor wariness.
Increasing investor maturity may also be playing its part as investors are learning to avoid opportunistic tokenised sales.
ICO Future Prospects
In light of continued institutional scrutiny, it is unlikely ICOs will continue to be the boons they were in 2017. However, with the Chicago’s Mercantile Exchange having cleared the way for Bitcoin derivatives trading in 2018, some are predicting a new wave of interest in the crypto phenomenon in the new year. The knock-on effects for ICOs appear likely to be positive.