ICOs Printed $13 Billion Out of Thin Air: BitMEX, TokenAnalyst Research

Colin Muller

Nearly $13 billion may have been “made incredibly easily, with very little work, accountability or transparency,” BitMEX’s research arm concluded in a post yesterday. BitMEX utilized data compiled by TokenAnalyst.io on funding of initial coin offerings (ICOs) conducted late 2017 and 2018, in order to understand how the ICO teams themselves handled their raised funds.

BitMEX arrived at the $13 billion figure by calculating how much ICOs originally raised in 2017-18, and then adjusting for how much prices have declined since then. But they are keen to also point out that “there are many inaccuracies and assumptions involved in producing the [TokenAnalyst] data.”

Printing Money?

One of the main upshots of the report was that the ICOs issued themselves a vast amount of their own tokens, in addition to selling their tokens to the public. And by virtue of selling tokens to the public, the tokens that ICOs issued to themselves gained a market value.

In fact, according to the data, not even 20% of the initial raises consisted of funds actually sold to buyers - with the vast majority instead consisting of such self-issued tokens. The sales, typically sold for Ethereum, only had the effect of defining a market price of the projects’ tokens.

BitMEX estimate that ICO teams may still own $5 billion worth of their own tokens - again, with that figure having dropped significantly in the past year - and also may have already profited $1.5 billion by selling proprietary tokens.

Qualifications of the Report

The entire report is qualified, as mentioned above, by the disclaimer that the data are somewhat preliminary, or rough.

For those tokens are still held by ICO teams, BitMEX point out that their liquidity is often very low - meaning their paper market value could quickly change if teams tried to sell any of the tokens.

They also point out that the identification of development teams' wallets was conducted with machine learning, and that data have not had the human touch of individual inspection. Because of this, BitMEX reckon that parts of the data are "likely to be inaccurate at individual project level.”

Finally, BitMEX did not read every single whitepaper to determine if there was some caveat in the handling of development funding, that they were unaware of.

Arthur Hayes, BitMEX’s outspoken founder and CEO, summarized the entire report with his characteristic glibness by saying “When you create poo poo out of thin air, gravity is a bitch.”

Crypto Market Update: Focus on BTC, ETH, BCH, BNB, XMR, and DASH

Siamak Masnavi

This article provides a quick overview of how the crypto markets have been doing—with the focus on Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Binance Coin (BNB), Monero (XMR), and Dash (DASH)—over the past 24-hour period.

Overall, September 17th is proving to be a bit of a mixed day, with 12 of the top 20 cryptocurrencies (by market cap) in the red at press time (around 06:25 UTC).

BTC-USD

BTC-USD 24 Hour Chart - 17 Sep 2019.png

The bad news is that are still waiting for the launch of Bakkt's physically-delivered daily and monthly Bitcoin futures contracts. So, Bitcoin is still trading mostly sideways, hovering around the $10,300 mark. The good news is that the launch is expected to take place in less than one week (i.e. on September 23), as was confirmed by this tweet that Bakkt sent out on September 16:

ETH-USD

ETH-USD 24 Hour Chart - 17 Sep 2019.png

The Ether (ETH) price continues its upward movement toward the $200 mark, up another 2.24% in the past 24-hour period (making it up 4.32% in the past 7-day period). What may have helped the Bitcoin price yesterday (September 16) is the announcement by crypto payment processor BitPay that in the near future it will be possible for its customers to accept Ether payments for purchases of goods and services. Also, the BitPay wallet will support Ether.

Ethereum co-founder Vitalik Buterin had this to say about the news:

"It is exciting to see BitPay leading the way in integrating Ethereum into global payment systems. This truly opens up a new world of possibilities for the Ethereum ecosystem, and together we can continue to be a leading innovator for real world use cases for cryptocurrencies.

BCH-USD

BCH-USD 24 Hour Chart - 17 Sep 2019.png

On Monday (September 16), Bitcoin.com announced that it had entered into a strategic partnership with Taiwanese smartphone manufacturer HTC, as a result of which the Bitcoin.com wallet will come preinstalled on HTC's current and upcoming blockchain phones (Exodus 1 and Exodus 1s):

BNB-USD

BNB-USD 24 Hour Chart - 17 Sep 2019.png

Although BNB is currently in the red, this may change during the next several hours once all of the six mini announcements that Binance plans to make today have come out:

The first of the six announcements that Binance CEO Changpeng Zhao (aka "CZ") referred to is the addition of support for Cosmos (ATOM) to Binance's Margin Trading platform:

XMD-USD

XMR-USD 24 Hour Chart - 17 Sep 2019.png

OKEx Korea announced on Monday (September 16) that it intends to delist all five privacy coins it is currently supporting, i.e. XMR, DASH, ZEC, ZEN, and SBTC, due to concerns that these cryptocurrencies do not allow it to implement FATF's so-called "travel rule". 10 October 2019 is the date on which transaction (i.e. trading) support ends.

DASH-USD

DASH-USD 24 Hour Chart - 17 Sep 2019.png

Since OKEx Korea's delisting announcement mentioned DASH, you would expect it to be down today, just like XMR. However, it is not, and that is very likely due to the fact that today (September 17) is the day that trading in DASH is expected to start on Coinbase Pro on/after 09:00 PST (16:00 UTC) provided that there is sufficient liquidity.

Featured Image Court: Photo via Pixabay.com