ICOs raised $8.3 Billion in Q2 2018, but 50% of Projects Miss Goals

 In Altcoins, Exchanges

ICORating published their review of the ICO space for the second quarter of the year. The report reaffirms previous notions – while the market is growing, a lot of projects fail to meet expectations.

The ICO market has doubled compared to 2017, according to ICORating’s Q2 research. The independent organization claims total investments have exceeded $8.3 billion, while a lot of projects (55%) have failed to achieve their goals.

The total funding may seem incredible, compared to the $3.3 billion from the previous quarter, but the majority of the difference is due to EOS. The project has raised close to $4.2 billion over an extended period of time and simply finished its fundraiser in the current quarter. Still, even excluding EOS, the data shows growth.

Following EOS, Telegram is the second biggest project, which highlights one of the new developments:

“One of the trends in the 2nd quarter was an increase in the share of tokens allocated to private and presale stages, and, accordingly, a decrease in allocations for crowdsales.”

Overall, the paper concludes there is a big discrepancy between the few big and successful projects and the plethora of small ones, which didn’t attract enough funds. Half of the ICOs started in Q2 2018 raised less than $100,000.

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As mentioned previously, 55% of all projects failed, but it’s worth pointing out why. The vast majority (57%) of unsuccessful offerings were at the idea stage. While a lot of teams at the same level have also acquired funds, investors generally prefer seeing a real product before backing it.

In terms of sectors, financial services and blockchain infrastructure have gathered the most funds. While some ICOs can be placed in either category, their popularity is indicative of the profit-seeking behavior of investors. That being said, more creative ideas are also in the works –  the number of Gaming and VR related projects has doubled quarter-over-quarter.

The report also has a few troubling numbers when it comes to trading the tokens after they are released:

  • only 7% of all ICOs reached an actual exchange;
  • the average listing time has grown by six days;
  • the median return on all projects in the period is (-55.38%).

In summary, the report is a tale of two stories. While some ICOs manage to attract interest and as a whole funding is up, a lot of teams face difficulties. This is totally aligned with the findings of other researchers, like KPMG and Autonomous NEXT.

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