56% of ICOs are not interested in living long

More than half of all startups launching ICOs go bust within four months after the end of their token sales.

Scientists from Boston college have analysed 2 390 projects which finished ICOs before May, 2018. Only 44,2 % of startups existed longer than 120 days since the day their token sale started.

A lot has been said about the fact that ICOs entail huge risks for all parties concerned. These include risks for startups, investors, even Bounty campaign participants and all those who are engaged in marketing and project advancement.

Nevertheless, the ICO as a form of raising funds continues to exist and the cryptocurrency market continues to grow rapidly. Since 2016 the cryptocurrency market capitalisation has grown from $20 billion to $320 billion, that is, by almost 16 times, and 2018 became a record year in terms of invesment amounts.

All this despite considerable numbers of scammy projects and the unfavourable statistics of ICO failures. Analysts explain it by saying that the big risks and losses connected with failed projects are outweighed by the possibility of receiving superprofits from one successful project.

Probably the reason for the “high death rate” of projects after the end of token sales is that the ICO is still considered exclusively an opportunity to gain easy money.

Ostensibly, the main goal of projects is to advertise an idea to sell tokens and then offer them at a stock exchange. Investors are interested in buying tokens at a cheaper price, waiting for their price to grow and getting rid of them. The usual laws of the stock exchange. It creates an impression that neither the investors, nor the projects are interested in technologies on blockchain.

For example, we (FairWin team) are often asked “What are your target markets?” Actually, this question means not where we plan to sell the games and the platform, but from what countries we plan to attract investors. That is, supposedly, the ultimate goal of our project is to simply launch an ICO.

Probably that is why it turns out that some startups that have working products on blockchain eventually refuse from ICOs, so they are launched by those who will never release a functioning product. Such division into the speculative market of cryptocurrencies and ICOs and the blockchain developments one seems a little bit unnatural. It looks like a transition period which should end shortly.

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