ICO – A Risky Business

ICO results in 2018 are completely varying with the result than what was in the year 2017. New evidence have suggested the fact that at an average one in 2 ICOs failed in the 2nd quarter of 2018. It is also evident that those who somehow succeeded suffered huge losses. The failure rate has been somehow increasing in the ICO at an alarming rate. It is estimated that according to data of Q2 2018, 55% of the so called new set of the initial coin offerings failed to complete in the period of second quarter.

 

Some of the analysts are taking this as overview that the quality side of the projects in the ICO market is getting worse.  Regulatory pressure by SEC, ICO Ban, Ban on digital platforms also has dampen the mood.

ICO - A Risky Business

If we leave out huge amounts of funding that has been raised by the likes of Telegram and EOS in recent times, There has been an increased rate of coin death with the tendency of low-quality altcoins to die fast. As the ICOs exploded over almost nothing to be a multibillion-dollar market in the year 2017. In the year 2018, they have come across to be much more speculative, or even risky and dangerous to the layperson investor, also their worth fall down much.

 

The increasing failure rate has somehow not impacted rise in the amount of money being invested into the platform of ICO tokens. There are around 827 projects who raised $8.3 billion through the medium of initial coin offerings in the second quarter of the year. This is in comparison to $3.3 billion raised in the first quarter. Some projects are attracting bigger sums and some of the projects are not able to raise even their softcap.

 

However above data cannot be termed as success or any positive impact on market as its possible that due to less price of ETH,BTC investors are buying more alongwith Institutional investors. However 55% is a pretty big failure rate and tells how much risky is this business.

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