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Disclaimer: this article does not contain investment advice or recommendations. Every investment and trading move carries risks, you should conduct your research when you make a decision.
ICO market data are provided by ICObench, based on project announcements registered in the ICObench database, which includes over 5,100 ICOs from August 2015.
In 2018, 2284 initial coin offerings (ICOs) came to an end and investors were able to choose, on average, between 482 sales of tokens every day of the year. During 2017, the corresponding values were 966 and 91 ICO respectively.
However, the economic results are less impressive: the total amount raised in 2018 was almost $ 11.4 billion, compared to just over $ 10 billion in 2017, an increase of 13%.
A balance of the general trend of the ICO market in 2018 is, in fact, a double-edged one. With the ICOs in March 2018, which raised almost $ 1.75 billion, the first half of the year marked the highest point of growth since the start of the upward trend started in late spring 2017, although June 2017 data is an anomaly, as shown below. On the other hand, the final months of the year recorded a radical recession, as in November 2018, which brought in just $ 0.36 billion, the worst result since May 2017.
Both trends reflect the volatility of the entire cryptography market during 2018, in particular Ether, given that Ethereum is the platform most of the ICOs released on their token, with 84.29% of projects , against 1.25% of Stellar and 0.55% of NEO.
Ether reached its highest historical price on January 13, 2018 (almost $ 1352), while the lowest level of the year was touched between December 14 and 15 (about $ 84, with a loss of around 94 percent of its value). The ICO market seems to react to underlying cryptocurrency trends in slightly volatile ways. In consideration of the funds raised, the spread between the choices of March and November 2018 is around 79 percent.
Considering data from a medium to long-term perspective, the funds raised by ICOs at the end of the year are still well above the level at the beginning of 2017. Even considering the first 15 days of December – data available as press time – in January 2017, the capital raised by the ICOs amounted to about 1.8% of the funds available during the last month of 2018, while the capitalization of Ether therefore represented approximately 9% of the level of December 2018.
More ICO, less resources
The number of new ICOs listed by ICObench during the year followed the trend already shown before considering the funds raised: March 2018 recorded the largest number of new projects inserting the database (528), while the number of incoming ICOs has slightly decreased since the end of the summer, with the lowest figure recorded in October, when there were 213 new ads. In this case, however, the decrease is less evident than the decline in the amount of capital accumulated: therefore, a rather large number of ICOs continue to compete for the shrinking of resources.
Consequently, the average amount of funds raised by a single ICO during 2018 is lower than in the previous year – $ 11.52 million, against $ 24.35 million in 2017. In addition, the size differences in terms of the actual results of each ICO remain significant, even if the the divergence between the amount of capital raised by the ICOs has decreased, in particular with an increase in the average size of the smaller ICOs: the less successful ICO that ended in 2017 with a positive result (over $ 1) raised $ 420, while the worst result for 2018 was status of $ 761.
More significantly, the range of ICOs that can be considered medium to small in size compared to funds raised declines, from $ 1.49 million to $ 40 million in 2018, while the range has been $ 1.4 million to $ 45 million during the last year.
The deviation from the average values is higher among the projects ranked in the highest ranking, that is to say, 5% of the ICO sample reaches the highest number of loans. In this case, the 2017 distribution data were partially distorted by the record achieved by a single project, the new EOS blockchain, which closed ICO last year in June of that year and raised almost $ 4.2 billion – which is, so far, the largest ICO in history. Aside from EOS, the best actor of 2017 has accumulated $ 258 million while The best result for 2018 was $ 575 million.
In 2018, 5% higher than the capitalization sample (41 ICOs) accounted for approximately 31.7% of all funds raised. Among these leading groups, 10 Ico reached $ 100 million or more, focusing around 16% of all available capital on the market over the course of the year. In 2017, the same percentile (21 ICO) accounted for more than 63% of all funds. However, these data fall to 21.6% if the EOS value is not included in the sample.
ICOs become (a little bit more) scattered all over the world
In 2018, ICO promoters were still choosing to establish their headquarters in a rather small number of countries: at the end of the year, the United States, Singapore and the United Kingdom were the countries hosting the largest number of ICOs since 2015, and these three were also the countries with the newest ICOs that were concluded in 2018. In the last year, the United Kingdom overtook Russia in the overall standings, while Germany reached the eighth position, surpassing Canada and the Netherlands – the last of which came out the top 10.
Considering the entire ICO sample indicating a precise location in their white papers, the spatial concentration decreased from 2017 to 2018: today, the 10 countries with the largest number of ICO locations represent 59 percent of the total the projects launched since 2015, while a year ago, this value was around 75%.
However, the concentration remains very high, as seen in the economic indicators. Ico hosted by The top 10 countries represent around 78 percent of the capital raisedand the projects establishing their headquarters in Only the United States has accumulated almost 32% of the funds. In 2017, these values were even higher: 90% and 61%, respectively.
Taking into account the economic data related to the new projects ending in 2018, the dynamics among the countries is similar to the trend of the ranking by the hosted ICOs. The rise of Estonia (from the 11th in 2017 to the seventh a year later) and Lithuania (from 21 to 14) demonstrates the dynamism of Eastern Europe. Considered still a part of the Old Continent, Gibraltar has risen 4 positions (from the 15th to the 11th), thanks to the activism of local administrators and businesses in the promotion of the British territory of overseas as new safe haven for blockchain companies.
Looking at Asia, the fall in the ranking of mainland China (from 10th to 12th) is offset by the highest level achieved by Hong Kong, which has moved from 12th to ninth. Finally, the growing weight of some Caribbean tax havens – such as the Cayman Islands, which rose from ninth to sixth place, and the British Virgin Islands, from 29th to eighth – underlines the relevance for ICOs on issues as regulations and taxes.
ICO by sector: a strong core and growing applications
Considering the distribution of projects fueled by ICOs in 2018, the industries that have attracted most of the investments are the sectors closest to the development of the blockchain economy: platforms that allow interaction between user networks, smart contracts, Internet-based products, and other types of infrastructure related to some IT network environments. These accounted for around 30 percent of the funds raised during the year.
On the other hand, the fintech sector, which includes both bank and financial investments, has accumulated $ 4.4 billion, is new blockchain have attracted investments of over $ 4.2 billion. However, many of the 1,111 new cryptocurrencies planned have not completed their ICOs with economic success.
Other industries that achieved positive results in 2018 were positioned in the IT sector and included such companies involved with software, big data or artificial intelligence. However, some significant investments were intended for applications in other sectors, such as business-oriented services, with $ 2.4 billion (7.4 per cent) in funds raised, and entertainment-related industries and the media, with $ 2.1 billion (6.4 percent).
The presence of other sectors further away from IT or high-tech industries is of little importance: production accounted for about 1.3 percent, which includes the production of electronic devices, while projects in companies based on education or art amounted to around 1 percent.
A comparison with the distribution of the sector in 2017 is rather difficult due to the overwhelming weight of the ICO of EOS, since that year the new blockchain companies represented 40.6% of the various sectors. However, it is likely that we can recognize both a steady growth trend that involves the main industries and an increasing role of some fields of application closer to the end users.
Increasing expectations clashes with reality
The sum of all hard (HC) protection sets for token sales that ended in 2018 was five times higher than the ICO goal in 2017, with $ 83 billion versus nearly $ 15 billion.
The target for soft caps (SC) was even stronger. In 2018, these were 12 times the cumulative value expected in 2017, amounting to $ 13.7 billion compared to $ 1.1 billion in the prior year. As a result, projects ending in 2018 saw the creation of a narrower gap between HC and SC than it was in 2017: Cumulative HC exceeded the lower threshold by six times, while the ratio was more than double that of 2017, which had a cumulative HC of 13 times the cumulative SC.
Despite growing expectations, the market has not responded to such optimistic figures. The HC scheduled for 2018 was, in fact, 173% higher than Ether's actual market average capitalization during the year. Looking at the funds actually collected, at the end of 2018, the ICOs attracted around 23.7% of the average value available on the Ethereum ecosystem during the year, while the value compared to 2017 was higher than 47.8 %.
Considering the total funds raised by the 2018 ICOs that specified both the soft and hard hoods in their white papers, slightly more than 11 percent of the cumulative planned HC was achieved, while 45.5 percent of the cumulative SC was. In 2017, ICOs reached 17% of the hard cap set and 97% of the soft cap set.
The growing number of projects competing for capital during 2018 represented a strong barrier to entry, as unique 43.3 percent of ICOs could raise at least $ 1 (compared to 57.6% in 2017). However, the performance of token sales in 2018 that exceeded the first step was better than in 2017, like 19.2 percent of the projects reached at least its soft cap – compared to 9.6 percent a year ago.
Despite the greater number of ICOs launched during the year, the gap between the total number of token sales that ended in 2018 and the few who reached a hard cap is quite similar to the successful channeling recorded in 2017. In the last year, only 6 percent of ICOs were able to reach their hard caps, while 6.7 percent did so in 2017.
2018 recorded the summit of the rally experienced by the ICO market starting from the middle of 2017, and a subsequent descending phase that seems far from the press times. Just over five years ago, Mastercoin was the first project that used an ICO to fund itself. The ICO market is therefore too young to interpret last year's data as a first cycle that could be repeated in the future on a larger scale (such as the many "deaths" of Bitcoin demonstrated) or as a sign of a radical change in the market prospects.
In fact, more and more critics blame the trustworthiness of ICOs or some of their typical promotional tools, while attention now focuses on alternative methods to finance the cryptography industry, such as security token (STO) or other possible traditional investment vehicles.
Even so, the picture at the end of 2018 leaves hope for a recovery in the prospects of the ICOs: even after a dramatic downsizing, the market is even bigger than at the beginning of the upward trend in 2017and the fact that a concentration in both localization and industries is diminishing is perhaps a sign of wider adoption.
Moreover, in 2017-18, the "ICO-bonanza" allowed the birth or development of many companies, offering token sales promoters a wide range of high quality services, from strategic consulting to marketing, from legal services to # 39; start incubators. The industry today is, therefore, more complex, robust and structured than a year ago, and this could be a significant advantage in terms of promoting the next, more sustainable, growth wave of the ICO market.
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