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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."
Who really buys this shit? It's like you just open your wallet and say "take it all please."
With half of them dying in 4 months, it's basically playing rouge or noir.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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.
Investing is gambling.
Those who claim otherwise are trying to sell you a "sure thing", which only reinforces my point.
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.
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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."
An ICO is a short lived event by definition. It's the cryptocurrency that will live a few months after.
No, investing isn't gambling, it's not black and white like that.
There's more of a scale. At one end you have "gambling" and at the other you have "investing". At the far gambling end of the spectrum you have games of chance (e.g. roulette), binary options (which is gambling dressed up to look like investing), slot machines etc - basically all the types of things where the house always win. At the other end you have things like bonds, traditional long term buy and hold in blue chip companies etc. There's still some risk but on that end of the spectrum, it's not a zero sum game nor "the house always wins".
If you say all investing is gambling because there's some risk and can never be a sure thing, then you get to the reductio ad absurdum argument that absolutely everything is gambling, e.g keeping your money in a savings account is also gambling because that's not a sure thing either.
Oolite: Elite-like game. For Mac, Linux and Windows
So they're just like almost any other Tech IPO - sell while the FOMO is strong.
So, according to your definition BTC is not gambling since I keep winning year after year.
No, investing isn't gambling, it's not black and white like that.
There's more of a scale. At one end you have "gambling" and at the other you have "investing". At the far gambling end of the spectrum you have games of chance (e.g. roulette), binary options (which is gambling dressed up to look like investing), slot machines etc - basically all the types of things where the house always win. At the other end you have things like bonds, traditional long term buy and hold in blue chip companies etc. There's still some risk but on that end of the spectrum, it's not a zero sum game nor "the house always wins".
As you have stated, there are levels of risk. Any level above zero would be considered gambling, because you're wagering on an uncertain outcome. You can use many terms to describe it, but at the end of the day it's still rather black and white as to you accepting a risk with the potential outcome of losing your entire investment.
And quite honestly, the "house" here would be considered Wall Street, and in the end they sure as hell aren't losing regardless of your performance or even your participation.
If you say all investing is gambling because there's some risk and can never be a sure thing, then you get to the reductio ad absurdum argument that absolutely everything is gambling, e.g keeping your money in a savings account is also gambling because that's not a sure thing either.
Yes, certain activities (like savings accounts) can essentially reduce the inherent risk down to near zero, but most would not consider savings accounts as primary investment vehicles. If you're looking for zero risk, then you're looking to insulate your wealth, not invest it. Perhaps the absurdity would be to attempt to not recognize and respect investments that include risk as gambling, because shit happens in any game of chance.
Investing is not gambling, it is choosing to not spend money today in order to increase productivity (and spending ability) tomorrow. Speculation isn't even gambling - that involves transferring an existing risk to someone more capable of managing it (think farmers locking in the price of their crops, through investors purchasing commodity futures). Gambling is about creating financial risk out of thin air. No one actually stands to lose anything based on the order in which a bunch or horses cross a line (except maybe the time wasted watching said horses), nonetheless they choose to create financial risk for themselves by betting on which horse will cross first.
By these definitions, I would classify ICOs as gambling - you are betting on the possibility that there are still greater fools in line behind you.
Gambling is simply defined as an activity that involves wagering on an uncertain outcome. You can try and use many terms to describe the various levels of risk, but unless you reduce the risk down to zero and remove the possible outcome of losing your investment, it's called gambling.
Nothing you have described above changes the fact that investing is gambling. It all still involves an element of chance. There's a chance you could win, and there's a chance you could lose. That pretty much describes Las Vegas too.
You seem to be very determined to convince us that anything with an uncertain outcome is gambling. The problem is that everything has some element of risk. I could wake up tomorrow morning, slip on the tub and hit my head on the edge of the sink. So is it a gamble to get up in the morning? Where do we draw the line?
The definitions of gambling that I see include terms like "high risk" and "games of chance". If everything is gambling then the term looses all meaning.
Crypto-sporidium Can be fatal
You seem to be very determined to convince us that anything with an uncertain outcome is gambling. The problem is that everything has some element of risk. I could wake up tomorrow morning, slip on the tub and hit my head on the edge of the sink. So is it a gamble to get up in the morning? Where do we draw the line?
Uh, you draw the line around this particular topic of financial investments, which is what we're discussing. Yes, everything in life is essentially a gamble, but let's keep the lines drawn where they logically should be. I've not escaped that logical border when I define any financial investment that involves risk as gambling, because it is. There is a chance that you could lose your entire financial investment. If you can afford to do that, then go for it. Gamble away. Take risks. If you can't afford to lose it all, then don't take the risk. It's that simple.
The definitions of gambling that I see include terms like "high risk" and "games of chance". If everything is gambling then the term looses all meaning.
Again, you're trying to drag this out of context. Within the realm of financial investments, there is almost always a risk. A chance of betting and losing it all. It's not merely ironic that we use these same exact terms to describe traditional "games of chance"; it's accurate. Whether you want to believe investing is gambling or not does not change the fact that risk is inherent, and losing everything is a possible outcome.
If you could count cards in blackjack and achieve a 51% win rate mathematically would you consider that gambling or investing?
If you've removed all inherent risk of losing your capital, then it is an investment. That said, not too many investments are actual investments with zero risk. A savings account is not an investment vehicle; it's a method of insulating an investment to protect it.
As far as your scenario goes, you've manipulated the outcome to minimize the risk of losing everything, but at 51% it's still going to take you quite a long time for the game of chance to come up in your favor enough to call it an investment. That all gets down the semantics of your expected rate of return, and your chances of being allowed to play. Sometimes casinos decide when you stop winning...
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.
I don't think you understand what that acronym means.
die = decease in earnest.
There have long been too many Earnests in the world. I knew one and he was a total [REDACTED]!!!
That's not investing. Speculating, maybe. More like gambling.
That's positively derptastic.
Did you know that "speculative" is literally[sic] one of the enumerated risk levels in investing?
You seem to be very determined to convince us that anything with an uncertain outcome is gambling.
I think almost everybody else agrees on the meaning of the words, and they acknowledge that every time you get out of bed you're gambling that it is worth the risks involved, like slipping in the bath.
Where you're expected to draw the line is based on the context of the sentence; if the context is investing, then you should probably be advised that investors casually use the word "gambling" to describe investments with unacceptable risk, but also that certainty is inversely proportionate to rewards, and high rewards are not considered automatically bad. The possibility of high rewards certainly doesn't preclude the activity from being considered investing!
As you have stated, there are levels of risk. Any level above zero would be considered gambling, because you're wagering on an uncertain outcome. You can use many terms to describe it, but at the end of the day it's still rather black and white as to you accepting a risk with the potential outcome of losing your entire investment.
under that definition everything in life is gambling and the word investment doesn't exist. Even putting your money in a bank account or under your mattress is just gambling.
With investments their is NOT always a winner and loser, both sides of the transaction can win, so no you are not playing against the house. investment is a weighted risk where the return outweighs the risk, gambling is hoping to get lucky and beat the odds/house.
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.
Investing is gambling.
Those who claim otherwise are trying to sell you a "sure thing", which only reinforces my point.
If you are sensible and have a reasonably large amount of money to start with (so you can think long term and live off your existing money in the short term) then investing is the exact opposite of gambling. Except in the short term, rich people get richer with no risk. All they have to do is not be greedy.
To have a right to do a thing is not at all the same as to be right in doing it
No you're not telling the truth.
The truth isn't the truth if you leave out things. Such as important details. In some cases the law has a word for that, Fraud.
There are no regulations for coin yet. So the fraudsters are out there. Pump & Dump, etc.
Just look at the youtube videos. You don't want bitcoin, buy Tron. It's about to take off! It might blip a little. If that went up to $20,000 a coin, that would be great.
In last year's bitcoin runup people were mortgaging their houses to buy bitcoin. My wife and I were thinking - that's nuts. Today it's a fraction of what it was and now they have a big mortgage note to pay, probably for decades.
Famous one is politics. If you elect me your taxes won't go up. You elect him. Taxes go up because while they didn't raise your taxes, they raised your assessment on the property. An example of where they told the truth was the Republicans in the 1990s. Contract with America. They said if we elected them they'd get a balanced budget and they did. Unfortunately they also had term limits and they departed at the end of their term and Democrats took a lot of those seats and continued to screw things again. It was nice, we actually had a rebate on taxes. Well some of us did. The Democrats tried to hijack it all for the poor. In other words, give my refund to someone else who doesn't want to work. Probably an illegal alien.