To date more than 4,000 ICO, which gathered in total about $ 12 billion. Most of them fail within 4 months after the end of the fundraiser.
At least so says a study conducted by a small team of Boston College. According to the study, only 44.2% of the projects show any activity on his Twitter account on the fifth month of existence.
These numbers are certainly shocking, but they perceive it is worth taking into account the fact that the project is evaluated only for its activity on Twitter.
Determining the life expectancy of the ICO, the team of Hugo Benedetti and Leonard Kostovetsky used the intensity of tweets to analyze the life cycle of projects. They suggested that the lack of tweets during the fifth month of the project’s existence means that he is “dead”.
The founders of the document analyzed not only the life cycle of the projects, but also the chance to generate profits for their investors. They came to the conclusion that the most attractive of the ICO are the ones who manage to solistice tokens on cryptocurrency exchanges:
83% of the 694 ICO-projects that do not report on the collected funds and do not receive listing on the stock exchange no longer be active after 120 days after the ICO. Of the 420 ICO-projects that manage to raise some capital, but that fails to get on stock exchange 52% “die,” and only 16% of the 440 ICO-projects that managed to raise funds and to get on the exchange cease to exist.
How profitable to invest in ICO projects?
The study authors also compared the return on investment in ICO projects, IPO projects.
Benedetti and Kostovetsky came to the conclusion that “unlike an IPO, the tokens continue to generate anomalous returns,” the price of tokens continues to grow within 6 months after the start of the project.
The document says:
The average yield on ICO projects is 179%. We compared the price of tokens during the ICO, and for 16 days after contact with the exchange. Even for the projects that do not fall on the exchange within 60 days after the ICO, the average yield is 82%.
The authors also believe that the greatest profit generate tokens in the first month after getting on exchange. And although the authors recognize that such a situation may indicate numerous bubbles on the market ICO, this situation, and abnormally high profits are normal for “extremely risky and unregulated market.”