ICO Market Report 2018/2019 – Performance Analysis of 2018's Initial Coin Offerings

24 Pages Posted: 4 Feb 2020

See all articles by Mathias Fromberger

Mathias Fromberger

Technische Universität München (TUM) - TUM School of Management

Lars Haffke

Technische Universität München (TUM) - TUM School of Management

Date Written: December 31, 2019

Abstract

Initial Coin Offerings (ICOs) are currently one of the most fashionable topics in the area of financial markets. For token issuers, they are a success story. In 2018 alone, more than $ 14 billion dollars have been raised in ICOs. From the investors’ perspective, however, things do not look so shiny. Lots of them claim to have lost significant amounts of money invested in tokens issued by more or less reputable companies.

In this market report, we analyze the ICOs of 2018. We illustrate the ICO market of that year and scrutinize how prices of the issued tokens have developed until mid 2019. Thereby, we take the perspective of an investor that bought tokens initially from the issuer. More than 90% of 2018's ICOs were based on the Ethereum Blockchain.

We found that investors, which invested in ICOs during 2018, had only roughly an 8% chance that their tokens traded above their ICO issue price after six months. These numbers have not changed by July 2019. Nine in ten tokens trade below their ICO price. More than 70% of tokens have lost substantially all their value. This could indicate that the market gets rid of the those ICOs which are initiated by companies without a proper product or without a serious intention to develop a sustainable business. This could help the ICO market as a whole to become mature. We will continue this research in an ICO Market Report 2019/2020.

Keywords: Initial Coin Offering, ICO, Token, Blockchain, Cryptocurrency, Venture Capital, Crowdfunding, Ethereum, Coin, Initial Security Offering, Security Token, STO, Utility Token, 2018, 2019

JEL Classification: G11, E22, M13, O16, G30, G31, K00, K22

Suggested Citation

Fromberger, Mathias and Haffke, Lars, ICO Market Report 2018/2019 – Performance Analysis of 2018's Initial Coin Offerings (December 31, 2019). Available at SSRN: https://ssrn.com/abstract=3512125 or http://dx.doi.org/10.2139/ssrn.3512125

Mathias Fromberger

Technische Universität München (TUM) - TUM School of Management ( email )

München
Germany

HOME PAGE: http://www.law.wi.tum.de

Lars Haffke (Contact Author)

Technische Universität München (TUM) - TUM School of Management ( email )

Arcisstr. 21
Munich, Bavaria 8033
Germany
+498928925348 (Phone)

HOME PAGE: http://www.law.wi.tum.de

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