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Quarterly ICO Market Analysis [Q3 2018]

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This report presents data on ICO market changes during 2018. Special emphasis has been placed on an analysis of the changes that took place in the third quarter of 2018.

1. General analysis of the ICO market (during the third quarter)

1.1. A brief overview of ICO market trends

The third quarter of 2018 was not as successful for ICOs as the first and second quarters. Nevertheless, the total amount of funds collected exceeded $2.4 billion. In this regard, the 20 largest ICOs accounted for more than 40% of this amount (around $1 billion) (Table 1.4).

More than 600 ICOs were completed during Q3 2018. The website Icobench.com alone shows 525 completed projects for the period from July 1-September 30. This same website also shows more than 240 projects that are scheduled to start after October 1, 2018.

Despite the high risk of placing funds in ICOs, the statements of many publications on the existence of numerous fraudulent projects, and the depreciation in the prices of the tokens of many projects, this area continues to develop in anticipation of positive changes on the cryptocurrency market. Some ICOs issuing new tokens are in fact concealed offers of securities, which could be dangerous for backers. Due to the absence of clear legislative and regulatory principles on ICOs in most countries, ICO participants encounter new difficulties and possibilities.

Yet, nevertheless, the third quarter was rich in interesting events (Table 1.1) and large ICOs (Table 1.4). For example, the leader by funds collected in the third quarter was the tZERO project, which is a subsidiary of the Blockstain Overstock.com company. According to the information from a Forbes publication dated August 9, tZERO collected $134 million. The project was launched on December 18, 2017, and was developed to meet SEC requirements. tZERO is the first alternative trading system for cryptographic tokens that the US Securities and Exchange Commission (SEC) assigns to the category of securities. The goal was to collect $250 million. However, according to information from the press release, the funds collected by tZERO equaled $134 million. GSR Capital will subsequently purchase a share in the project worth $270 million when the company’s capitalization reaches $1.5 billion.

Table 1.1. Brief ICO market overview, key events and news for Q3 2018

Factors and events(link to source) Date of news Description Type of impact
1.                     Three Reasons Why Malta’s ‘Blockchain Bills’ Are So Significant[source: coininsider.com] July 5, 2018 “First in the world”: three laws regulating the crypto industry have come into force in Malta. The country’s politicians expect an economic upturn in the new industry. FavorableICO ⇑
2.                     World’s First Initial ‘Convertible Coin Offering (ICCO)’ Launches in Malta
[source: ccn.com]
July 12, 2018 Malta is ahead of the curve. A week ago they passed a set of draft laws there to regulate the digital sector, and now they are launching the first ICCO in history. FavorableICO ⇑

 

3.                     New Ethereum Blockchain Token Standard ERC777 Could Replace ERC20[source: ethnews.com] July 25, 2018 The new Ethereum blockchain ERC777 standard token is entering the final stages of development and will be presented to the general public in August. The ERC777 standard is being touted as a more flexible alternative to the ERC20 standard. The developers have also announced that it will allow quicker and more streamlined transactions to be performed. FavorableICO ⇑

 

4.                     Introducing Telegram Passport[source: telegram.org] July 26, 2018 Passport is an authorization mechanism in services that require a person’s personal data for access (for example, financial applications, ICO projects, etc.). FavorableICO ⇑

 

5.                     ICORating’s Report: Investments in ICOs More than Doubled In a Year[source: Coinspeaker] August 9, 2018 Backers have started to provide more financing to ICOs, despite the fact that the projects are more often failures. 55% of campaigns in Q2 2018 were unable to collect the required amount. UnfavorableICO ⇓
6.                     EU Lawmaker Wants to Include ICOs in New Crowdfunding Rules[source: coindesk.com] August 13, 2018 ICOs in Europe will be regulated by securities law. But not all of them. The limits set forth in the draft provided by a committee of the European Parliament concern the amount of funds collected. UnfavorableICO ⇓
7.                     South Korea Wants to Build a Special Cryptocurrency Zone for Companies[source: usethebitcoin.com] August 17, 2018 If the idea of the authorities of the Jeju Province is approved, it will become the only region where the performance of ICOs is officially permitted. UnfavorableICO ⇓
8.                     China Crypto Crackdown Continues by Opening up Illegal ICO Token Sales Reporting Option[source: bitcoinexchangeguide.com] August 29, 2018 For now, some countries are actively implementing cryptocurrencies and promoting ICOs, while others such as China continue to block everything. The residents of the PRC have even been asked to file complaints against token sales that have not been noticed by the regulators. UnfavorableICO ⇓
9.                     European Parliament Members, Blockchain Experts Meet to Discuss ICO Regulation[source: cointelegraph.com] September 5, 2018 If the initiatives are passed, startups will be able to legally conduct their campaigns and collect funds in all 28 member states. This will give a boost to the development of cryptocurrency projects, since they currently have a quasi-legal status and experience difficulties. FavorableICO ⇑

 

10.                 Malta Stock Exchange Signs MoU With Binance to Launch Security Tokens Trading Platform[source: cointelegraph.com] September 11, 2018 The parties hope that their partnership will facilitate the development of the country’s blockchain ecosystem, and the new project will win a spotless reputation as it will fully comply with all normative requirements. FavorableICO ⇑

 

11.                 US Judge Says Initial Coin Offering Covered by Securities Law[source: bloomberg.com] September 11, 2018 When considering a case on two fraudulent ICOs, a US federal court issued a decision that could impact all subsequent token sales in the country. UnfavorableICO ⇓
12.                 ICO-Generated Tokens to Be Classified as Securities in the UAE[source: btcmanager.com] September 12, 2018 Tokens in the United Arab Emirates are being equated with securities: the authorities have called upon local startups to consult with lawyers, and promised that this is only part of the regulatory plan. FavorableICO ⇑

 

13.                 France Finalizes New ICO Framework to Attract Innovators Globally[source: cointelegraph.com] September 14, 2018 According to the document, those wishing to hold an initial coin offering must first receive the approval of the Autorité des Marchés Financiers (AMF). Therefore, backers can count on “certain guarantees.” FavorableICO ⇑

 

14.                 China C-Bank Issues Fresh Warning on Crypto, ICO Risks[source: cryptovest.com] September 19, 2018 The Chinese authorities are trying to persuade citizens not to use cryptocurrencies and to refrain from participating in ICOs. The latest news shows that the official bans are easily circumvented. UnfavorableICO ⇓
15.                 Juventus Soccer Club Is Launching a Crypto Token to Give Fans a Voice[source: coindesk.com] September 24, 2018 Club management hopes that this step will help build a completely new system of interaction with fans, as token holders can take an active part in the Turinese club’s life, choose the color of their uniforms, match dates, opponents, etc. FavorableICO ⇑

 

16.                 How People Are Still Buying Bitcoin and ICO Tokens In China[source: bitcoinist.com] September 27, 2018 The investigation by the Chinese Xinhua news agency basically expands on the material of the South China Morning Post: Chinese citizens use VPN and Telegram to trade in cryptocurrencies, and exchanges interact with them from other countries through fly-by-night companies. FavorableICO ⇑

 

 

Table 1.2 shows the development trends on the ICO market since 2017. Only popular and/or successfully completed ICOs (i.e. ICOs which managed to collect the minimum declared amount of funds) and/or ICOs listed on exchanges were considered.

Table 1.2. Aggregated trends and performance indicators of past (completed) ICOs1,2,3,4

Indicator 2017 QI2018 QII2018 QIII2018
Total amount of funds collected, USD million 6 890.1 11 453.84 4 268.73 2 434.0
Number of companies that completed an ICO1 514 254 290 197
Maximum collected, USD million (ICO name) 258(Hdac) 5000 (Petro)41700 (TON)

320 (Dragon Coin)

300 (Huobi token)

151 (Bankera)

100 (Envion)

4000 (EOS)3575 (TaTaTu)

133 (Basis) &

118 (Orbs)

 

134 (TZERO)117 (KitToken)

102 (Dfinity)

100 (Hedera Hashgraph)

Average collected funds, USD million 13.4 45.1 14.7 12.4

Note:
1 This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), tokendata.io, icodrops.com, icodata.io, coinschedule.com, cryptocompare.com, smithandcrown.com, and icobench.com. For some ICOs information may currently be incomplete (for instance, the number of funds collected). ICOs that collected less than $100,000 were not considered.
2 Date when data was updated – September 16, 2018.
Not including EOS, which collected $4 billion or 7.12 million ETH over the year from June 26, 2017, to June 1, 2018.
4 Including the TON Pre-ICO-1,2 ($1.7 billion) and the Petro ICO ($5 billion). According to the data from the official website of the Petro ICO, Petro sales equaled more than $5 billion, which is equivalent to more than $4 billion euros or $31 billion yuan (http://www.elpetro.gob.ve/#about). However, the data on the amount collected by El Petro from some other sources differ. For example, according to criptomoedasfacil.com, the number of funds collected cannot exceed $2.3 billion taking into account discounts, the project White Paper indicates $4.387 billion, and other sources mention the $3 billion stated, among others, by the President of Venezuela Nicolas Maduro.

The data for the previous period were adjusted to account for the appearance of more complete information on past ICOs. The number of funds collected via ICOs during the past quarter (July-September) equaled $2.4 billion. This amount consists of the results of 518 successfully completed ICOs, with the largest amount of funds collected equaling $134 million (tZERO ICO). The average amount of funds collected per project equaled $4.7 million (see Tables 1.2, 1.3). Overall, more than 150 ICOs were completed last month, but information on the number of funds collected is not available for all of them.

Table 1.3. Amount of funds collected and number of ICOs

Month Collected,$ million Number of ICOs* Average collected,$ million
January 2017 3.7 7 0.53
February 35.3 11 3.21
March 7.3 4 1.82
April 115.2 18 6.4
May 264.2 21 12.58
June 649.5 33 19.68
July 719.1 36 19.97
August 511.2 48 10.65
September 914.2 68 13.44
October 949.6 91 10.44
November 1 109 91 12.19
December 1 611.9 86 18.74
Total, 2017 6 890.1 514 13.4
January 2018 1 662 92 18
February 2018 2 675 88 30.4
March 2018 7 117 74 96.2
April 2018 1 045 100 10.4
May 2018 1 723 110 15.7
June 2018 1 501 80 18.8
July 2018 897 93 9.6
August 2018 1 049 50 21.0
September 2018 487.8 54 9.0
Total for 2018*** 18 157 741 24.5

* This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), tokendata.io, icodrops.com, icodata.io, coinschedule.com, cryptocompare.com, smithandcrown.com, and icobench.com.
Information on funds collected is not available for all ICOs (information for last week is tentative and may be adjusted). ICOs that collected less than $100,000 were not considered.
** More than 1,000 ICOs were performed in 2017. However, the data for the 514 largest and most popular ICOs, the data of which can be processed, were considered when calculating the total amount of funds collected during 2017.
*** Including the TON Pre-ICO-1,2 ($1.7 billion) and the Petro ICO ($5 billion). According to the data from the official website of the Petro ICO, Petro sales equaled more than $5 billion, which is equivalent to more than $4 billion euros or $31 billion yuan (http://www.elpetro.gob.ve/#about). However, the data on the amount collected by El Petro from some other sources differ. For example, according to criptomoedasfacil.com, the number of funds collected cannot exceed $2.3 billion taking into account discounts, the project White Paper indicates $4.387 billion, and other sources mention the $3 billion stated, among others, by the President of Venezuela Nicolas Maduro.
**** Not including EOS, which collected $4 billion or 7.12 million ETH over the year from June 26, 2017, to June 1, 2018.
***** The data for 2018 has been updated (date updated: October 1, 2018).

Table 1.3 shows that the largest amount of funds was collected via ICOs in February-March 2018, mainly due to the appearance of major ICOs. The highest average collected funds per ICO was also seen in February-March 2018.

In total, more than $18 billion were collected via ICOs in the first three quarters of 2018 (and that is without the funds of EOS, an ICO that lasted for an entire year). This amount was collected by a total of only 741 projects.

Figure 1.1. Trends in funds collected and number of ICOs since the start of 2017

1.2 Top ICOs during Q3 2018

Table 1.4. Top 20 ICOs by the number of funds collected during Q3 2018

Name of ICO Category Collected, $ million   Completed
1 tZERO Trading & Investing 134 12.5% August 6, 2018
2 KitToken Finance 117.4 11.0% August 31, 2018
3 Dfinity Data Storage 102 9.5% August 29, 2018
4 Hedera Hashgraph Infrastructure 100 9.3% August 1, 2018
5 London Football Exchange Events & Entertainment 71.3 6.7% August 4, 2018
6 Cryptosolartech Energy & Utilities 68.3 6.4% July 20, 2018
7 Online Commerce & Advertising 47.2 4.4% July 31, 2018
8 Alchemy Finance 46.6 4.4% September 10, 2018
9 4New Energy & Utilities 45 4.2% August 10, 2018
10 OSA (Optimal Shelf Availability) Finance 40 3.7% August 31, 2018
11 GENEXI Drugs & Healthcare 37 3.5% September 10, 2018
12 Terra Gaming & VR 32 3.0% August 29, 2018
13 Vault12 Privacy & Security 32 3.0% September 26, 2018
14 Sparkster Infrastructure 30 2.8% July 9, 2018
15 Origo Network Infrastructure 29.9 2.8% August 11, 2018
16 Usechain Infrastructure 29.3 2.7% August 8, 2018
17 Nervos (Series А) Infrastructure 28 2.6% July 18, 2018
18 Vite Infrastructure 28 2.6% August 1, 2018
19 Grapevine Drugs & Healthcare 26.7 2.5% August 15, 2018
20 TravelBlock Travel & Tourism 25.2 2.4% July 18, 2018
Total, top 20   1 070 100%  

* This report uses the data of ICOBox, ICOBox Blockchain Research Center (IBRC), tokendata.io, icodrops.com, icodata.io, coinschedule.com, icobench.com, and other specialized sources.
** The category was established based on expert opinions.
*** Only popular and/or successfully completed ICOs (i.e. ICOs which managed to collect the minimum declared amount of funds) and/or ICOs listed on exchanges were considered. Information may be incomplete for some ICOs (for instance, the amount of funds collected). ICOs that collected less than $100,000 were not considered.

Table 1.4 shows the top 20 largest ICOs by funds collected, most of which belong to the categories Infrastructure, Finance, and Trading & Investing.

Figure 1.2. Top 20 ICOs by the number of funds collected during Q3 2018

During the third quarter of 2018 more than $2.4 billion were collected (this amount includes 197 ICOs). However, due to the fall in total capitalization of the cryptocurrency market since the start of 2018, the adjustment has crossed over to ICOs as well. This is leading to a steady fall in the hard cap requirements of projects, a drop in the effectiveness of fund collection, and many projects are not disclosing data on the number of funds collected on their official websites. The future effectiveness of ICOs will depend directly on the change in cryptocurrency market capitalization, as well as on the formation of legislative norms for holding ICOs in the countries of the European Union, the USA, Japan, South Korea, UAE, and, of course, China.

Annex – Glossary

Key terms Definition
Initial coin offering, ICO A form of collective support of innovative technological projects, a type of presale and attracting of new backers through initial coin offerings (token sales) to future holders in the form of blockchain-based cryptocurrencies and digital assets.
Token sale priceCurrent token price Token sale price during the ICO.Current token price.
Token reward(Token performance) Token performance (current token price ÷ token sale price during the ICO), i.e. the reward per $1 spent on buying tokens.
Token return (see token reward) Performance of funds spent on buying tokens or the ratio of the current token price to the token sale price, i.e. performance of $1 spent on buying tokens during the token sale, if listed on an exchange for USD.
ETH reward – current dollar value of $1 spent on buying tokens during the token sale Alternative performance indicator of funds spent on buying tokens during the ICO or the ratio of the current ETH price to its price at the start of the token sale, i.e. if instead of buying tokens $1 was spent on buying ETH at its rate at the start of the token sale and then it was sold at the current ETH price.
BTC reward– current dollar value of $1 spent on buying tokens during the token sale Similar to the above: Alternative performance indicator of funds spent on buying tokens during the token sale, i.e. if instead of buying tokens $1 was spent on buying BTC at its price at the start of the token sale and then it was sold at the current BTC price.
Token/ETH reward This ratio describes a market participant’s economic benefits and disadvantages resulting from buying tokens during the token sale relative to buying ETH. If the result is over 1, the market participant spent his funds more efficiently on buying tokens than if he were to have spent his funds on ETH.
Token/BTC reward This ratio describes the market participant’s economic benefits and disadvantages resulting from buying tokens during the token sale relative to buying BTC. If the result is over 1, the market participant spent his funds more efficiently on buying tokens than if he were to have spent his funds on BTC.

Disclaimer: While the information in this document is believed to be accurate, ICOBox makes no representations or warranties, express or implied, with respect to the completeness or accuracy of the information contained herein. The information presented in this document may include certain statements, estimates and projections. Such statements, estimates and projections reflect various assumptions by ICOBox concerning anticipated trends, which assumptions may or may not materialize. No representations are made as to the accuracy of such statements, estimates or projections, and actual performance may be materially different from that set forth in such statements, estimates or projections. Prospective financial results may be affected by fluctuating economic and political conditions and are dependent upon the occurrence of future events that cannot be assured. ICOBox makes no warranty or assurance regarding the achievability of projections or the data, information and assumptions relied upon herein. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. This document is for information purposes only and is not intended as an offer to sell securities, cryptocurrency or tokens, nor does it contain any recommendations or advice on any investments in any particular company or named assets. ICOBox expressly disclaims any and all liability for any representations expressed or implied, contained in, or omitted from, this material. ICOBox is a provider of SaaS solutions for companies seeking to sell their products via distribution of tokens (ICO). ICOBox does and seeks to do business with companies covered in its research reports and buy any named assets.

Source: Coinspeaker

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