250

ICO Analysis for Q2 2018

Welcome back to our quarterly ICO report series. Here is our Q1 ICO analysis if you missed it. We also do monthly ICO analyses if you prefer.

The second quarter of 2018 continued the downtrend in the crypto market. Total funds have decreased heavily over the past three months.

For this report, we will apply the same success criteria as used in our monthly ICO reports. Please refer to any previous reports for details. Pre-ICOs are not included in this report, however we will discuss the top-performing projects in greater detail below.

ICOs already raised $5.6B in 2018

In the second quarter ICOs raised $2.3B, that’s 30% less than in Q1.

Total cumulative funds raised, millions USD.
Diagram 1. Total cumulative funds raised, millions USD.

The success rate is decreasing

This quarter 368 ICOs were completed, compared to 390 in Q1. Only 28% of them were successful.

Distribution of projects by status.
Diagram 2. Distribution of projects by status.

The success rate has been dropping slowly since the beginning of 2018.

Dynamics of ICO success.
Diagram 3. Dynamics of ICO success.

Almost half of all ICOs fail to report financial data.

This dark trend has increased dramatically in a short period of time…

Dynamics of ICOs with no financial information.
Diagram 4. Dynamics of ICOs with no financial information.

The number of ICOs is dropping each month

This correlates with the overall market downfall: it seems risky to start an ICO in worsening market conditions. However,
there was a slight spike in the amount of funds collected in May. We provided a broader explanation in the May report.

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.

If we try to look at this in a quarterly perspective, the negative define is even more pronounced.

Dynamics of the total funds raised per quarter, USD million.
Diagram 6. Dynamics of the total funds raised per quarter, USD million.

The table below shows the information about funds raised in Q2 2018

Raised by Total Funds Median Funds
All projects $2,309M $5.5M
Successful projects $1,633M $10.3M
Unsuccessful projects $676M $2.8M
Raised in crypto (ETH) ETH 3.83M ETH 0.01 M

Table 1. Funds raised (if stated), USD million.

Medians give us a hint of market maturitization

Even though the median funds raised per month is fluctuating, the overall median for successful and unsuccessful ICOs
is heading towards stability. Median funds for all ICOs this quarter are the same as Q1.

Median funds raised per month, USD million.
Diagram 7. Median funds raised per month, USD million.
Median funds raised per quarter, USD million.
Diagram 8. Median funds raised per quarter, USD million.

Crypto investments are still stable

The ETH price has continued to fall since the beginning of the year. Even so, ETH remains the main cryptocurrency used for investing.

ETH price ( Coinmarketcap.com ), USD.
Diagram 9. ETH price ( Coinmarketcap.com ), USD.

To evaluate funds raised in crypto we converted other currencies into ETH. After this input we can see that the total
amount of ETH raised is quite stable, but still lower when compared to the first quarter of this year.

Total crypto raised, ETH million.
Diagram 10. Total crypto raised, ETH million.

If we keep all the variables the same, and create a conversion at the current USD to ETH price, it’s clear the market is stable. The spike in May was mostly caused by a slight ETH price revival.

Total funds raised in fiat and crypto, USD million.
Diagram 11. Total funds raised in fiat and crypto, USD million.

Quarterly dynamic confirms our hypothesis, the crypto investments are quite stable.

Total funds raised in fiat and crypto per quarter, USD million.
Diagram 12. Total funds raised in fiat and crypto per quarter, USD million.

ICOs tend to use the Ethereum blockchain

86% of all ICOs use Ethereum’s blockchain to build their products (71% in Q1). Only 9% of projects develop their own
infrastructure.

Blockchain usage in ICOs.
Diagram 13. Blockchain usage in ICOs.

ICOs reaffirm Pareto (20/80) principle

Applying the Pareto principle shows that the minority of ICOs raise the majority of funds.

Top 20% ICOs compared to others, USD million.
Diagram 14. Top 20% ICOs compared to others, USD million.

No “big deals” for this quarter, except for EOS and several non-ICO fundraisers.

Here is a list of the best-performing ICOs for Q2 2018.

Top 10 ICOs, USD million.
Diagram 15. Top 10 ICOs, USD million.

Apart from the main ICOs there were several blockchain projects that successfully raised massive amount of funds. Here are the most noticeable rounds, which raised more than $4.7B together with the main ICOs.

The best-performing pre-ICOs and other non-ICO projects, USD million.
Diagram 16. The best-performing pre-ICOs and other non-ICO projects, USD million.

We did not include EOS in our monthly reports due to its multi-phases structure.t. But it can’t be ignored. EOS was concluded on the 1st of
June, raising around $4B throughout the year.

During April and May EOS raised $1.56B, that’s just $0.75B less than all other ICOs of Q2 combined.

The amount of funds raised by EOS and other ICOs, USD million.
Diagram 17. The amount of funds raised by EOS and other ICOs, USD million.

Funds distribute among ICOs asymmetrically

Despite the reduction in the amounts collected, distribution of funds has stayed similar to the first quarter. Most of the funds collected are between $20M and $50M.

Distribution of successful and unsuccessful projects by funds raised, USD million.
Diagram 18. Distribution of successful and unsuccessful projects by funds raised, USD million.

There are changes in the number of attempts ICOs are undertaking to raise funds. Last quarter there was half as many ICOs raised under $1M, however, almost all of them are unsuccessful. This explains the increase of median for unsuccessful projects.

Distribution of ICO quantity by funds raised (from the 232 ICOs that stated their results).
Diagram 19. Distribution of ICO quantity by funds raised (from the 232 ICOs that stated their results).

50% of all ICOs collected under 10% of their target or hard cap.

Distribution of projects by funds raised, as a percentage of ICOs’ cap.
Diagram 20. Distribution of projects by funds raised, as a percentage of ICOs’ cap.
Distribution of funds raised, as a percentage of ICOs’ cap, USD million.
Diagram 21. Distribution of funds raised, as a percentage of ICOs’ cap, USD million.

Only 18% of all ICOs covered their caps for more than 90%, however taking 60% of the market.

“Finance”, as always, is leading the market

Number of ICOs per industry.
Diagram 22. Number of ICOs per industry.

Despite the finance dominance, most successful ICOs were focusing on developing blockchain platforms.

ICO duration strongly affects the amount of funds collected

For this report we categorized ICOs duration data by 10-day-plots. The ICO success rate dropped significantly per period, regarding both funds raised and quantity. There are still a huge amount of funds being raised on the first day of ICO campaigns.

Distribution of funds raised by ICO duration, USD million.
Diagram 23. Distribution of funds raised by ICO duration, USD million.
Distribution of ICO quantity by duration.
Diagram 24. Distribution of ICO quantity by duration.

The amount of funds collected per 1 ICO confirms the aforementioned pattern.

Distribution of funds raised per 1 ICO, USD million.
Diagram 25. Distribution of funds raised per 1 ICO, USD million.

Conclusions:

  • The overall amount of funds raised in the second quarter was $2,309M. This was distributed between 368 ICOs.
  • Apart from the main ICO campaigns, the market is driven by massive private sales and “non-ICO” fundraisers, collecting just as much as all ICOs in Q2 2018.
  • Overall investments in blockchain-based projects exceeds $4.7B.
  • Only 28% of projects closed successfully in Q1.
  • 86% of ICOs are built on top of the Ethereum blockchain.
  • The majority of funds raised by projects is between $20M and $50M.
  • ICO success rate depends on the campaign duration and is decreasing over time.