ICORating, one of the leading authorities in ICO research and listings, has published a paper analyzing the performance of the ICO Market in the third quarter of this calendar year.
The paper was published last Thursday and is available for download.
The ICORating analysts concluded that Q3 2018 was not as successful as Q2 and Q1, as only $1.8 billion were raised this quarter.ICOs raised more money in Q1 2018 ($6.3 billion) than the whole of 2017, and the figures continued to grow in Q2 ($8.35 billion).
The research also led the analysts to identify some market trends. The first was that there is an overall feeling of disappointment regarding ICOs.
Many factors were pointed out as the cause but the significant drop in ICO returns seem to be pivotal. In Q3, the ICO median return was just 22%, and 79% of tokens were traded below the ICO price. Other factors also pointed out were the increasing number of fraudulent ICO projects, the overall market downtrend, a lack of projects with original ideas, the slow pace of blockchain implementation, and the fact that investors have became more prudent in their decisions.
Other market trends include the development of regulatory frameworks, the fall in value of highly backed projects from 2017 and early 2018, and the rise in Security Token Offerings (STOs). Analysts predicted that STOs will be registering quick growth in Q4 2018 and 2019, despite still having an insignificantly small share of the crypto market.
The report also included many interesting statistics. In Q3 - a total of 597 ICO projects were staged, compared to 827 in Q2. 43% were able to raise more than $100,000 and only 4% have been listed on exchanges. A surprising 76.15% of projects had nothing but an idea, a gigantic increase from the 18.72% observed in Q2.
The majority of ICOs (64%) failed to complete their crowdfunding and most projects (67%) who intended to create a dApp also failed.
The 3 biggest ICO projects were London Football Exchange, Cryptosolartech and Alchemy. An average of $33 million was crowdfunded for each. However, if we analyze the whole of 2018 these projects are eclipsed by unicorns EOS and Telegram.
According to the type of the project’s token, almost half of ICOs (49.05%) issued Service Tokens, about one-quarter (25.3%) Utility Tokens, and roughly one-eighth (12.47%) Hybrid Tokens. In terms of funds raised however, projects offering Reward and Hybrid Tokens stole the show.
Europe Leading ICOs
Lastly, the report showed that the majority of projects originated in Europe (43%). Due to strict and unfriendly regulation, Asia displayed a 65% decrease in funds raised and 10% less projects based on the continent. Europe now leads in terms of fundraising as well, responsible for 48% of all funds raised in Q3 ($663 million).