During the last year, Initial Coin Offerings (ICOs) have been expanding. More investors are ready to place their funds in these projects, even when there have been important scams that harmed the industry.
According to a new research published by the Boston College School of Management, ICOs allow investors to gain important profits. The report analyzed more than 4,000 ICOs and tracked the value of tokens they have issued in different time frames.
It seems that the average ICO token increases in price 179% since it is launched to the market until it reaches at least one exchange. But the interesting fact is that even including the tokens that failed to be listed in the first 60 days, and that represent losses for buyers, investors were able to register 82% profits measured in USD dollars.
Additionally, investors that decided to sell their tokens in a longer time period – this is, between 90 and 360 days – registered even greater returns. For the first 90 days, individuals obtained 140 percent return, 430 percent if the investment was held 180 days, and an impressive 1,880 percent over 360 days.
This can also be seen when looking at the total market share of the main virtual currencies in the market. They have been losing part of their market against other smaller cryptocurrencies, in general, related to ICOs.
The Researchers Explained In Their Investigation:
“Our paper shows that ICOs investors are compensated handsomely for investing in new unproven platforms through unregulated offerings. It suggests that scams, while plentiful in number, are not as important in terms of stolen capital because investors are shrewd enough to spot (and underfund) them.”
Additionally, they explain that the results could be an indication of bubbles, but it is consistent with investing in risky platforms that have been not tried or tested before. One of the authors of the report, Hugo Benedetti, explained that it is not possible to make future predictions with the ICO market, but during the last months, the returns have been ‘largely positive.’