ICOs are an attractive way of funding for planned projects to collect. A study by the Boston College Carroll School of Management has shown that the majority of funded Startups do not have a long service life. After four months after Delivery of the Tokens to the buyers, they are considered dead.
Even if the big Hype seems to have something to falter, to show to a newly formed credit rating agencies, that Initial Coin are Offerings continue to be very popular. The Boston College Carroll School of Management has examined what happens to the funded projects after their ICO. The on 5. July published study has used more than 4,000 ICOs for the investigation. The PhD candidate of financial Sciences, Hugo Benedetti, and assistant Professor Leonard Kostovetsky directed the study.
56 percent of the crypto-Startups die quickly
According to the Ethereum World News, the ICO, the volume of the first half of the year 2018, surpassing the entire year of 2017. However, one must consider, in accordance with the ICO’s study of over 1,000 crypto projects as dead or dying. The valueless Coins, you may be still on a stock with real value. Accordingly, the market is flooded with „Coin-corpses“.
to identify the exact extent of this phenomenon, the study of the life of the ICO-funded enterprises under the magnifying glass. The researchers analyzed the intensity of Tweets from the Twitter Accounts of the Startups. In this way, the activity and thus the Existence of the company was derived. The researchers found that only 44.2 percent of the Startups existed after 120 days after the end of their ICOs. Accordingly, about 56 percent of the crypto Startups that have collected through Token sales, money, die, four months after the ICO.
In an Interview with Bloomberg Kostovetsky:
stressed, „What we found is that, once you get over three months, a maximum of six months, you can surpass other crypto currencies. The strongest return is actually in the first month.“
for Young companies and Startups have become the pricing in your ICOs cautious. In addition, more and more people in ICOs invest, so that earnings declined over time. The profits are according to Kostovetsky those who have sold their Coins on the first day of listing on the stock exchange, by four percentage points per month. According to the Coin buying and selling on the first day is the safest investment strategy. However, many private investors do not have this possibility. As a result of the study, he concludes that all investors should sell within the first six months. The long-term evaluation is in a market that is constantly changing, however, needs to be checked regularly.