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The performance of the initial parts offering (ICO) is in part characterized by a "general disappointment" in the third quarter of 2018, according to a study by the ICO ICORating analysis firm published on November 15 .
As the report indicates, 597 OICs raised more than $ 1.8 billion in the third quarter of 2018, well below the value of more than $ 8.3 billion that would have been collected in the previous quarter. A similar decline in investments has been reported in traditional venture capital (VC) financing for blockchain projects.
In the report, the drop in funding comes with a median return on investment (RDI) of -22% in the third quarter of 2018. As the report states:
"The same indicator was + 49.32% in the 1st quarter and -55.38% in the 2nd quarter."
The regulation is partly cited as a cause of the downward trend, as the US Securities and Exchange Commission (SEC) is increasingly cracking down on this method of fundraising, putting "hundreds" of projects at risk .
In June of this year, the President of the SEC said that although Bitcoin (BTC) is not considered a guarantee, most ICO tokens are likely to, requiring their issuers to register with the Commission.
During the third quarter – July to September 2018 – OIC funding decreased overall by 48%. A larger decline of more than 78% was announced in September – the last month of the third quarter – compared to May, the mid-second quarter.
Financing and success of the ICO. Source: ICORating
The ICORating report also indicated that 57% of the ICO projects that raised funds in the third quarter could not obtain more than $ 100,000.
During the third quarter, only 4% of tokens sold to investors during an ICO were publicly traded, compared to 7% reportedly listed in the second quarter of this year, ICORating notes.
The report also mentions that 19% of "previously announced ICO projects" in the third quarter removed their websites and social media accounts, 10% more than in the second quarter. Projects that disappeared after fundraising attracted 3% of total ICO funds in the third quarter, accounting for about $ 62.1 million, the report says.
The research also covers the stages at which projects tend to start their ICOs: out of all the projects included in the third quarter study, 76.15% were at the 'idea stage' When they ran their ICO, 18.72% more than in the previous quarter.
Regarding the choice of platform for the sale of chips, Ethereum remains king with 83.75% of ICOs who choose to release their chip on its blockchain.
More generally, the ICO market has fluctuated over the past year, recording two peaks in terms of both the number of projects and the amount raised in December 2017 and March 2018.
As reported previously by Cointelegraph, funds raised by international commodity organizations in October increased by 26% from September to $ 508.54 million from $ 403.1 million, while only 54 projects had to collect 1 dollar or more.
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