ICO Market 2018 vs 2017: Trends, Capitalization, Localization, Industries, Success Rate
2018 recorded both the highest point of growth of the ICO market and the most severe downturn since 2017.
New Year Special
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The ICO market data is provided by ICObench, based upon the projects’ announcements recorded in ICObench database, which includes over 5,100 ICOs since August 2015.
In 2018, 2,284 initial coin offerings (ICOs) reached their conclusion and investors could choose, on average, among 482 token sales opening every day of the year. During 2017, the corresponding values were just 966 and 91 ICOs respectively.
However, the economic results are less impressive: The total amount raised in 2018 was almost $11.4 billion, against little more than $10 billion during 2017, with a mere 13 percent growth.
A balance of the general trend of the ICO market during 2018 is, in fact, double-edged. With ICOs in March 2018 collecting almost $1.75 billion, the first half of the year marked the highest point of growth since the beginning of the upward trend that started in late spring 2017, although June 2017's data is an anomaly, as seen below. On the other hand, the closing months of the year recorded a radical downturn, such as in November 2018, which brought in just $0.36 billion, making it the worst result since May 2017.
Both trends mirror the volatility of the whole crypto market during 2018, especially of Ether, given that Ethereum is the platform the majority of the ICOs issued on their token, with 84.29 percent of the projects, against 1.25 percent raised on Stellar and 0.55 percent on NEO.
Ether achieved its historical highest price on Jan. 13, 2018 (almost $ 1,352), while the lowest level of the year was touched on between Dec. 14 and 15 (around $84, with a loss of about 94 percent of its value). The ICO market seems to react to the trends of the underlying cryptocurrency in slightly volatile ways. In view of the funds raised, the spread between the picks of March and November 2018 is about 79 percent.
Considering the data from a medium- and long-term perspective, the funds gathered by ICOs at the end of the year are still far above the level at the beginning of 2017. Even considering only the first 15 days of December — the data available as of press time — in January 2017, the capital raised by ICOs amounted to about 1.8 percent of the funds available during the last month of 2018, while Ether capitalization accounted then for about 9 percent of the December 2018 level.
More ICOs, fewer resources
The number of new ICOs listed by ICObench during the year followed the trend already shown before considering the funds raised: March 2018 recorded the highest number of new projects entering the database (528), while the number of incoming ICOs has fallen slightly since the end of the summer, with the lowest recorded figure being in October, when there were 213 new listings. In this case, however, the decrease is less evident than the decline of the amount of capital amassed: Therefore, quite a large number of ICOs are still competing for shrinking resources.
As a result, the average amount of funds collected by a single ICO during 2018 is smaller than during the previous year — $11.52 million, against $24.35 million in 2017. Moreover, the differences in size in terms of the actual results of each ICO remains relevant, even if the divergence between the amount of capital raised by the ICOs decreased, especially with a rise in the average size of the smallest ICOs: The least successful ICO that ended during 2017 with a positive result (more than $1) raised $420, while the worst result for 2018 was $761.
More significantly, the range between the ICOs that can be viewed as being medium-small to large on the basis of the funds gathered lessened, ranging from $1.49 million to $40 million in 2018, while the range was from $1.4 million to $45 million during the previous year.
Deviation from the average values is higher among the projects positioning themselves in the highest ranking, i.e., the 5 percent of the sample of ICOs reaching the largest amount of funding. In this case, 2017's distribution data was partially distorted by the record achieved by a single project, the new blockchain EOS, which ended its year-long ICO in June that year and gathered almost $4.2 billion — which is, until now, the largest ICO in the history. EOS aside, the 2017's best performer amassed $258 million, while 2018's best result was $575 million.
During 2018, the top 5 percent of the sample by capitalization (41 ICOs) accounted for about 31.7 percent of all the funds gathered. Among this leading group, 10 ICOs reached $100 million or more — concentrating about 16 percent of all the capital available