ICO Returns Waning?

In their last two weekly emails, which unfortunately are not published on their blog, TokenData.io has shared some interesting findings around ICOs lately. Last week, they shared:

We’re also tracking more than 140 tokens that have been issued through ICOs (142 to be precise). A quick analysis on the returns of these 142 tokens – relative to BTC and ETH – shows that “only” 31% of tokens outperform both base cryptocurrencies (graph can be found below) if held since issuance.

And this week, they shared further data showing a slowdown:

On average, tokens outperformed the two base cryptocurrencies for the first 3 quarters of the year. And – although time and data are very sparse – this outperformance trend has come to a slight halt right now. The 4 ICOs that took place in October and whose tokens are being traded, have underperformed both ETH and BTC. Moreover, BTC is outperforming both tokens and ETH for the first time. While it’s too early to proclaim that “winter is here” the TokenData team will keep you up to date in the coming weeks as this unfolds.

Below is a screenshot of their data. Interestingly, the average amount raised by the 40 “successful” ICOs is much lower than the ones that underperformed ETH and BTC ($14.8 million vs $10.2 million).

 tokendata - ico performance

Likewise, ICOs have raised much more as of last vs pre-2017 and Q1.

  • 2016: $3.8 million
  • Q1 2017: $1.6 million
  • Q2 2017: $17.9 million
  • Q3 2017: $14.2 million
  • Q4 2017: $31.5 million

While recency likely plays a part, since some tokens haven’t had time to see large gains, the fact that the values are starting significantly higher decreases the changes of a huge gain significantly.