ICO Market Down 97% Since May 2018: BitMEX Research

Initial coin offerings (ICO) have only managed to raise $40 million so far this year, according to BitMEX’s research division.

Researchers at the Bitcoin Mercantile Exchange, or BitMEX, a Seychelles-registered and Hong Kong-operated cryptocurrency derivatives exchange, published a blog post on May 13th, 2019 in which they noted that the ICO market is down 97% since May 2018.

Companies “Changing The ‘C’ In ICO To An ‘E’”

According to BitMEX’s research arm, several blockchain projects have “changed the ‘C’ in ICO to an ‘E’, perhaps in an attempt to assist with raising capital.” Indeed, there have been quite a few initial exchange offerings (IEOs) which have been launched this year.

An IEO is also a type of crowdfunding campaign, however the fundraising process is usually facilitated by the management at a centralized cryptoasset exchange.

As noted in BitMEX’s blog, the Dfinity and Telegram ICOs (held during 2018) raised $1.7 billion and $195 million, respectively. However, the native tokens for both projects have not been listed.

Notably, the EOS ICO, which was launched by the management at Block.one, a Cayman Islands-registered open-source software publisher, generated a record $4.2 billion. However, the EOS token had been trading at -4% of its issuance price (at the time BitMEX released its report).

Projects Shutting Down Due To Regulatory Pressure

Due to regulatory restrictions, the highly-anticipated Basis stablecoin project was forced to shut down and the funds were returned to investors, BitMEX confirmed. Meanwhile, some seemingly promising projects such as PumaPay and UnikoinGold are currently trading at -93% and -88% of their issuance (at time of ICO) price, BitMEX’s researchers noted.

Going on to compare the funds raised via IEOs with ICOs, the data compiled by BitMEX revealed that the BitTorrent (BTT) token sale, held on Binance on March 2nd, 2019, managed to raise $7.5 million and the current “return vs IEO price” stands at 433%. Other IEOs also launched on Binance such as Fetch.AI and Celer are not doing as well, as their “return vs first exchange trade price” stands at -55% and -29.4%, respectively.

Most ICO Investors “Earned Strong Positive Returns”

Commenting on the relatively large number of IEOs launched in recent months, BitMEX’s research team acknowledged that the new type of crowdfunding model has been “somewhat successful.” The researchers confirmed that “smaller exchange platforms” have tried to introduce IEO models which are similar to those used by major exchanges including Binance, Huobi, Bittrex, and OKEx.

Most IEO investors have “earned strong positive returns based on the IEO [issuance] price,” BitMEX revealed. However, the researchers have found that the return on investment (ROI) has been “typically poor” after the tokens began trading actively on various exchanges.

According to BitMEX’s estimates,$38.9 million have been raised so far this year through IEOs (as of April 25th, 2019). Notably, Binance, the world’s largest exchange in terms of trading volume, has been “the most prolific IEO platform by a considerable margin,” BitMEX’s researchers concluded.

Some other key observations made by BitMEX’s research team are as follows:

  • “On average, only 4.4% of the total token supply [has been] made available in [IEO token] sales”,
  • “There are opportunities for project teams to make considerable profits from selling coins they granted to themselves,”
  • “The 2019 IEOs were priced at a level which implies a total market capitalization of $907.7 million, based on the disclosed total token supply.”

TRON Foundation Announces $20 Million TRX Buyback to Promote Market Stability

The TRON Foundation, an organization created to support the development of the TRON network, has recently announced a $20 million TRX token buyback that’s set to “promote community activity and market stability.”

According to a Medium blog post, the TRX buyback will be “by far the largest” token buyback plan the Foundation has ever had, and will have “the widest coverage in the secondary market.” The buyback is set to last for a year and will have several batches.

The TRON Foundation’s TRX holdings, it added, will be unlocked on January 1 of 2020, although the organization has no plans for its TRX at the time. Currently, one TRX token is trading at $0.034 after falling 10.6% in the last 24-hour period.

The token’s price dropped amid a major market sell-off that has seen the price of some altcoins – including Litecoin, EOS, and XRP – drop by well over 10%. The price of BTC is currently down 5.4% in said period. The selloff is likely being caused by traders taking profits off of the bull run we’ve been seeing since the beginning of the year.

Earlier this year, TRON announced a soon-to-be-released upgrade for its blockchain, called Odyssey 3.6. It’ll reportedly include features that are set to improve the network’s security and stability.

As CryptoGlobe covered, in May of this year the TRON Foundation announced BitTorrent, a leading peer-to-peer file sharing platform, would be incorporating the BitTorrent File System (BTFS) protocol to “allow users to receive and host storage on their computers with other individuals and businesses.”

The TRON Foundation has recently celebrated its Independence Day, as on June 25, 2018 the TRON mainnet was launched and its genesis block was created. Since then, the network has grown to over 3.1 million mainnet addresses, and an average of 1.5 million transactions per day, according to Justin Sun.