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Half of ICOs Die Within Four Months After Token Sales Finalized (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: About 56 percent of crypto startups that raise money through token sales die within four months of their initial coin offerings. That's the finding of a Boston College study that analyzed the intensity of tweets from the startups' Twitter accounts to infer signs of life. The researchers determined that only 44.2 percent of startups survive after 120 days from the end of their ICOs. The researchers, Hugo Benedetti and Leonard Kostovetsky, examined 2,390 ICOs that were completed before May.
Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, Kostovetsky said in a phone interview. But many individual investors can't participate in ICOs, so this option isn't open to them. Still, all investors should probably sell their coins within the first six months, the study found. "What we find is that once you go beyond three months, at most six months, they don't outperform other cryptocurrencies," Kostovetsky said. "The strongest return is actually in the first month." The Boston College study also found that ICO returns are declining, as startups have becoming savvier about pricing coin offerings and more people have jumped into ICO investing. According to Bloomberg, "Returns of people who sold tokens on the first day they were listed on an exchange have been declining by four percentage points a month, Kostovetsky said."
Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, Kostovetsky said in a phone interview. But many individual investors can't participate in ICOs, so this option isn't open to them. Still, all investors should probably sell their coins within the first six months, the study found. "What we find is that once you go beyond three months, at most six months, they don't outperform other cryptocurrencies," Kostovetsky said. "The strongest return is actually in the first month." The Boston College study also found that ICO returns are declining, as startups have becoming savvier about pricing coin offerings and more people have jumped into ICO investing. According to Bloomberg, "Returns of people who sold tokens on the first day they were listed on an exchange have been declining by four percentage points a month, Kostovetsky said."
Then you say "die within four months after an ICO"
I don't think you understand what that acronym means.
Who really buys this shit? It's like you just open your wallet and say "take it all please."
Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, ...
That's not investing. Speculating, maybe. More like gambling.
In other words, ICOs are just bilking idiot investors out of their money as everyone gets entirely stupid and thinks that since it's cryptocurrency they're going to get rich.
In some ways, this is no different from IPOs in that only the big investors on day 1 make any money and everyone else is left holding the bag ... but in this case you probably would have been better off if you weren't stupid enough to get in to begin with.
Yawn, whatever, cryptocurrency is an over-hyped fad, but otherwise doesn't affect me. Go ahead, lose your shirt, I don't give a fuck, I think this is hilarious.
Cryptocurrency has more exuberance than actual value, the faster people learn this the sooner I can stop hearing about it.
It seems like whenever there's an economic expansion of any kind, people are desperate to put their money in anything regardless of the chance of success. This particular time will be very interesting to look back on, because you basically have multiple different bubbles all going on at the same time and they all feed on each other. I feel old, but I really don't see cryptocurrency as anything more than a scam.
The mobile/app economy bubble is fed by the cloud bubble, which both feed the blockchain/cryptocurrency bubble, and all of them are sustained by The Cloud. Back in the 90s, if you wanted to sell bags of dogfood online and ship them for free to get eyeballs, getting started cost tons of money. You had to buy servers, colocate them in a data center, etc. and it cost millions to start up. Now, all you have to do is use the founder's credit card to buy AWS/Azure/GCP time and the money comes out much more slowly. This is why I think the bubble(s) are going to last a lot longer than the last one...there's way less pressure to IPO and topple the house of cards. Most of unicorn startups are being happily fed money by VCs rather than Grandma's pension fund buying into pets.com, and they need less every month.
My worry is that allowing these bubbles to live longer than they should will make them huge and cause an even bigger mess when everything comes crashing in. Look at Silicon Valley housing markets as an example. I live near NYC, so I'm not one to point fingers at crazy housing prices. But if i wanted to move there for a job, a similar house to mine, a similar distance to work would be 4 or 5 times the price of my already-expensive one here in suburban NY. Yet, people are happily buying/renting so they can cash in on the gold rush...no thanks.
"About 56 percent of crypto startups that raise money through token sales die within four months of their initial coin offerings."
Yeah, and 80 - 90% of start-ups die within the first 12 months, which leaves the obvious question; Are ICOs nothing more than scams, or is a four-month death essentially expected in this particular type of business?
Perhaps it's a bit early to really tell, but it's rather ironic that ICOs seem to have a success rate on par with damn near any other type of start-up (if not better), and yet we're questioning that activity worse than Al Capones tax auditor. All forms of investing are gambling at the end of the day.
Comment removed based on user account deletion
I regret that I didn't mine bitcoin back in 2010, and I regret that I didn't have the foresight to do an ICO last year. Oh well, I guess there are better ways to make money than fraud.
"First they came for the slanderers and i said nothing."
So they're just like almost any other Tech IPO - sell while the FOMO is strong.
Yes. Yes I do. Just Say No to kryptokurrency.
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They take this long to die??? Something's wrong here and I'll give anyone a million Stanley Nickels to tell me what it is.
Here, let me explain ICOs to non-crypto specialists. It's Kickstarter but with less accountability.
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