Monday, June 17, 2019

Research Shows that ICOs ‘Have Sold Almost as Much as They Raised’

Famous Hong Kong-based digital currency trading platform BitMEX has revealed the outcome of research that was conducted recently. Published earlier today on its official blog, the research shows that fund raised through Initial Coin Offerings (ICOs) is almost equal to funds sold.

The BitMEX Research

The research was done in conjunction with TokenAnalyst; a firm specialized in cryptocurrency resource. The BitMEX study revealed that even with the price decline of Ethereum (ETH) 2018, it further showed that the ICO projects still has about $93 million in “unrealized profits.”

The study highlighted the net profits “realized” by ICOs that was successfully conducted and it amounts to $727 million. The BitMEX and TokenAnalyst research read; “Rather than suffering because of the recent fall in the value of Ethereum, at the macro level, the projects appear to have already sold almost as much Ethereum as they raised (in US$ terms).”

According to the BitMEX research;

“Of the Ethereum still held by the projects, even at the current (approximately) $230 price, projects are still sitting on unrealised gains, rather than losses.”

The Diar Research

According to the data provided by Diar researcher, it is only necessary to conclude that this year has been a trying time for investors with a keen interest in Initial Coin Offerings. Diar researchers concluded that nothing less than 70 percent of projects “are now valued at less than what was raised during their ICO.” Diar researchers published on September 24, spelling out analysis as regards ICOs:

“Outside the Top 100 cryptocurrencies being traded, there is a $5 Billion shortfall against the total amount raised during an ICO for the 562 tokens with reliable information about their fund-raising.”

The Diar researchers also concluded that 7 out of 10 tokens that are situated “below” the screen fold has a relatively low valuation than when they were initially raised.

Down Side Would Have Impact on ICO?

According to the BitMEX, the question of whether the downside would have an impact on the ICO? Was countered with the market analysis of ETH/USD which had inched up over the weekend with the conclusion that it would have little impact on Initial Coin Offering (ICO) health. The BitMEX report added that;

“As a tool to raise funds, the ICOs have clearly been a phenomenal success, to such an extent that even a further significant fall in the value of Ethereum will barely make a dent into the success.”

Speculations from cryptocurrency analysts like Fundstrat’s Tom Lee have been that ETH will rise to $1,900 before the end of this year. However, ETH is currently trading at about $230 as at press time.

Though this is way below Tom Lee’s suggestion of $1,900, the ETH would need a very consistent bull market run to achieve this target. This might sound unrealistic or unachievable but the Bitcoin boom of last year is enough to make a statement that “anything” is possible when it comes to the increase in price of digital tokens.

Another factor worthy of consideration is the fact that we are in Q4 of the year, which has been a period where the bull run is usually experienced the most in the crypto market; this is an established fact which has been the custom for over three years now.

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