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ICO Market Almost Doubled in 2018, But Projects Failing to Raise Funding Increased

August 09, 2018 17:27
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The Initial Coin Offering (ICO) market over the past one year has expanded in a voluminously with total funds raised through ICO had crossed $11 billion in 2018. The figure is almost 10 times more compared to the sum of investments from ICO received in Q1 & 2 of 2017. The numbers are revealed by a cryptocurrency data firm ICORating in its latest report.

In the second quarter of 2018, a total of 827 projects have raised $8 billion in funding through ICO compared to $3.3 billion in Q1, 2018, an overall increase of 151 per cent. According to the report, funds raised by the EOS project accounts for most of this increase as they have collected $4 billion in the year-long conducted ICO.

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Industry segment which dominated the ICO market are Financial Services, Blockchain Infrastructure and Banking & Payment. Financial services led all other industries in both project and funding wise. And, geographical wise, Europe had the most number of the ICO launched during the period at 46 per cent of the total while North Americal collecting the huge chunk of the funding with 64.67 per cent share. The Asia-based project showed 20 per cent growth in funding but a 40 per cent decrease in the number of projects launched.

The report also mentioned that the share of Institutional Capital in the ICO market has increased while retail participation has decreased significantly.

Market Losing Confidence in ICO Market?

The report also showcased some of the disturbing facts about the ICO market. In Q2,2018 more than half of the ICO projects have failed to complete the funding process. The portal found out that, almost 55 per cent of the ICO project failed in Q2, 2018 which is 5 per cent higher than Q1, 2018 figures.

And, there are more disturbing fact about the decline in the report. The report concluded that the overall quality of ICO projects have worsened a lot and there are only small numbers of projects which have raised an average $50 million per project. The failed one couldn’t even cross the $100,000 threshold in term of attracting investment. PumaPay, a simple cryptocurrency payment and billing solution have single-handedly managed to raise $117 million in funding in May 2018.

The reports mentioned those ICO projects which involved in offering service and utility tokens were in the forefront of failure. The factor which affected the fundraising success are emission conditions, token type, and metrics indicating all ICO’s which fared poorly are actually not that bad in terms of quality.

The ICO report also highlighted the bearing angle in the ICO market during the second quarter, in which most of the ICO which launched during the period had a median return of 55 per cent loss compared to an impressive return of 49.1 per cent in Q1, 2018. Some part of the decline in ICO is also attributed to the long bearish phase of the cryptocurrency market.

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