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ICO Analysis for June 2018

Welcome to the ICO analysis for June 2018, provided to you by the Suicide Ventures analytical department. You can take a look at our previous reports on our blog.

This report covers 107 ICOs completed in May 2018 (pre-ICOs are not included). However, we have analyzed ICOs based on different phases. The results are calculated separately for each phase.

Number of ICOs per month.
Diagram 1. Number of ICOs per month.

These terms are the key metrics in our report:

  • “Soft cap” is the minimum amount required by the project.
  • “Target” is the funding goal as stated by the project’s team.
  • If a target is not stated, then we use the “hard cap,” which is the maximum amount the project hopes to achieve or the technical limit of the crowdsale.
  • The ICO market size covered in this report should not be considered the overall money flow coming into the crypto market from fiat, as there is still speculation surrounding tokens. We are simply exposing the willingness of crypto holders to participate in new projects with BTC, ETH, and fiat currencies.

What are the Success Criteria?

An ICO is considered successful if the following conditions are met:

  • The soft cap is reached.
  • More than 50% of the target or hard cap is collected.

An ICO is considered a failure if at least one of these conditions are met:

  • The soft cap is not reached.
  • Less than 50% of the target or hard cap is collected.
  • No information on the project status or funds raised is available, the official website has been deleted, and/or the official Bitcointalk thread has been cleared.
Distribution of projects by status.
Diagram 2. Distribution of projects by status.

If the soft cap, target, and hard cap are not stated, our experts will analyze the project and make sure the funds raised are sufficient to implement the business idea. Thus, if a company has collected the necessary funds to implement its roadmap, we deem it a success. If not, it is considered unsuccessful.

30% of all ICOs were completed successfully this month, mirroring last month’s stats. This indicator appears fairly stable from a long-term perspective, but it’s a bit depressing. The below
diagram shows the dynamics of ICO success.

Dynamics of ICO success in raising funds.
Diagram 3. Dynamics of ICO success in raising funds.

The ICO success rate, according to our criteria, closely correlates with the overall market downfall. The recent revival of the price of altcoins was unstable, and the market has continued its fall. BTC has just updated its 2018 lows, causing another bloodbath in the cryptomarket.

What About the Market Size?

Let’s see what’s going on in the market with regards to the funds raised.

Raised by Total Funds Median Funds
All projects $620M $7.5M
Successful projects $440M $11.2M
Unsuccessful projects $180M $4.8M
Raised in crypto (ETH) ETH 1.22M ETH 0.015 M

Table 1. Funds raised (if stated)

The amount of funds collected has heavily decreased, comprising $620M, which is 45% less than last month, at $897M. This has been the most significant fall since the beginning of the year.

Dynamics of the funds raised.
Diagram 4. Dynamics of the funds raised.

This month continues the downward trend started at the beginning of 2018, with the exception of a small revival in May. The number of ICOs is also decreasing slightly, this month by 16%. Nonetheless, a lot of this month’s ICOs had been rescheduled from previous periods; only around 30% of ICOs opened and closed within this month.

Dynamics of the total funds raised in correlation with the number of ICOs.
Diagram 5. Dynamics of the total funds raised in correlation with the number of ICOs.

This month, all ICOs combined raised 1.22M ETH. As we stated in our Q1 2018 ICO report, the amount of funds raised in crypto has been pretty stable. This month, the amount of ETH raised dropped by 10%, but compared to the overall market drop of 45%, that’s not so bad.

Total amount of crypto raised, millions ETH.
Diagram 6. Total amount of crypto raised, millions ETH.

If we convert these funds to the current price of ETH ($474 as of June 5), we can see the trend is quite flat, even with an ETH price drop of 22% from last month.

Total funds raised in fiat and crypto.
Diagram 7. Total funds raised in fiat and crypto.

The median of the funds raised increased by 41%, comprising $7.5M this month. You can track the dynamics in the graph below.

Median funds raised in comparison with total funds, millions USD.
Diagram 8. Median funds raised in comparison with total funds, millions USD.

All medians regarding ICO success have significantly increased from last month, which indicates that fewer low-funded ICOs are entering the market. At the same time, a lot of projects set realistic hard caps, following the market dynamics.

Median funds raised, millions USD.
Diagram 9. Median funds raised, millions USD.

How are Funds Distributed among Projects?

Each month, without exception, the top 10 ICOs account for around half of all funds raised. This month, the top 10 projects accounted for 45% of the total funds raised (52% last month).

Top 10 ICOs compared to the rest.
Diagram 10. Top 10 ICOs compared to the rest.

Most ICOs successfully raised funds ranging between $10 and $20 million USD, reinforcing our “realistic caps” argument. Projects in all previous periods raised between 20 and 50 million.

This month, only 25 ICOs hard-capped under $10M, compared to 40 in May, raising around $70M altogether. However, 46% of them were successful, which is quite high compared to the general success rate of 30%. Furthermore, a lot of projects raised very small amounts well below their soft caps. Only 12 ICOs had a soft cap below $1M. According to our criteria, all successful ICOs collected 70% of the total funds this month, which is 5% less than in May.

The following diagrams categorize the projects by total earnings and quantity per category.

Distribution of successful and unsuccessful projects by funds raised, millions USD.
Diagram 11. Distribution of successful and unsuccessful projects by funds raised, millions USD.
Distribution of ICOs by funds raised (from the 57 that stated their results).
Diagram 12. Distribution of ICOs by funds raised (from the 57 that stated their results).

55% of all ICOs (47% last month) collected under 10% of their target or hard cap. 17% (23% last month) almost fully covered their caps, representing around 46% of the total funds raised this month.

The below two diagrams show the distribution of ICOs and funds raised, as a percentage of the target or hard caps.

Distribution of projects by funds raised, as a percentage of the target or hard cap.
Diagram 13. Distribution of projects by funds raised, as a percentage of the target or hard cap.
Distribution of funds raised, as a percentage of the target or hard cap.
Diagram 14. Distribution of funds raised, as a percentage of the target or hard cap.

What About Scam ICOs?

Around 40% of all projects set soft caps. Only 3 ICOs reported their “failure” after not meeting their soft caps. 47% of ICOs did not provide results following the sale, which is the most negative insight for this month. This fact suggests that the majority of projects are most certainly dead or funded very poorly. Below, you can see the dynamics of this trend.

Dynamics of ICOs with no financial information.
Diagram 15. Dynamics of ICOs with no financial information.

Do We Have Any ‘Ninjas’?

There are still few ‘ninjas’ in the ICO market compared to the beginning of the year. However, it’s still quite clear that the success rate is dropping as time passes. Despite the small number of quick ICOs, ‘ninjas’ are still collecting a good portion of the total funds.

However, it seems to be obvious: good projects are often funded right in the beginning due to private investments, letting other participants cover 5-10% of the overall cap with no discounts.

ICOs now are even closer to traditional investments due to the upcoming uncertainty regarding regulations. Many ICOs are trying to limit the number of participants, which is controversial because of their decentralized nature.

Distribution of ICO quantity by duration.
Diagram 16. Distribution of ICO quantity by duration.

The below image illustrates the total number of funds collected during each period.

Distribution of funds raised by ICO duration, millions USD.
Diagram 17. Distribution of funds raised by ICO duration, millions USD.

Conclusions:

  • The overall amount of funds raised decreased from $897M in May to $620M in June.
  • The total amount of crypto raised was ETH 1.22M, compared to ETH 1.32M in May.
  • The total number of ICOs was 107, compared to 124 in May.
  • This month, there were only 8 pre-ICOs, which raised around $60M.
  • 30% of ICOs were successful, compared to 31% last month.
  • The median funds collected by all projects comprised $7.5M, compared to $4.4M in May.
  • 55% of all ICOs raised under 10% of their target or hard cap.
  • The top 10 projects collected 45% of all funds, compared to 52% in May.
  • 47% of ICOs did not report the amount of capital raised, compared to 30% in May.
  • The finance sector is still the most popular sector among blockchain projects. 20 ICOs were completed this month, collecting 19% of the overall funds. However, last month, financial ICOs accounted for 37% of the market. The “blockchain platform” category is second, with 15% of the market.

The ICO market, compared to late 2017, is in very poor condition. The total funds, as well as the number of ICOs, is decreasing each month. However, the general idea of decentralized solutions is still very viable. We believe the market is just trying to find new ways of funding, such as private sales or VC, as a workaround for the upcoming GDPR and regulatory issues. As soon as the rules are refined, we could see another, a much bigger wave of ICO fundraising. The main goals of future ICOs would not be just to raise funds for business development but also to transparently distribute assets among communities.

We will elaborate on these tends in our Q2 2018 report later this month.

Suicide.Ventures will continue to provide ICO analyses on a monthly basis.