Two independent studies analyzing initial coin offerings (ICO) are out with some striking findings. Studies conducted by ICO Report, an independent crypto rating agency, and Outlier Ventures, a blockchain, and crypto-focused venture capital firm, show that the third quarter was brutal for the cryptocurrency market. In total, as much as 64% of all ICOs have failed to complete their crowdfunding.
The market was “crushed” by the overall disappointment in traditional ICOs as a mean of venture financing. According to the ICO Report, the disappointment is a ramification of not-so-great returns of investment in previously conducted ICOs, a bearish environment that has engulfed cryptocurrency market and lack of transparency from the ICO projects, among other things. The fact that more than 76% of all offerings in Q3 had nothing else developed except the basic idea, which is an increase of more than 55% compared to Q2, speaks for itself.
For instance, 57% of ICO projects in Q3 failed to raise more than $100,000, while only 4% of offerings were ultimately listed on the exchange. Compared to May, funding of ICOs fell by a striking 78%. In total, ICOs managed to raise $1.8 million which is almost five times less than the reported $8.3 million raised in Q2.
The London Football Exchange raised more than $70 million for their project, which is the highest crowdfunding campaign in Q3, closely followed by Cryptosolartech, a project focused on cryptocurrency mining. On the other hand, service tokens represent almost half of all types found in ICO projects, while every fourth ICO offered utility token. Similarly, both service and utility tokens represent the highest number of failed ICOs.
In terms of industries represented, exchange and wallets, as well as financial services were ranked as the most popular industries, together attracting around 100 projects. However, the picture changes when it came to the funds raised. Financial services and blockchain infrastructure collected around $250 million in funding while the banking and payment industry comes in a distant third place with less than $100 million attracted.
Geographically, Singapore tops the ranking in terms of the number of projects (46) and funds raised ($241 million), while Europe is still the most dominant continent in the context of funds raised, as almost half of all funds raised were collected in the old continent.