ICORating Releases Overview of ICO Market Research Q1 2018
ICORating just released its ICO Market Research Q1 2018 report. The report highlights some of the biggest news, statistics, and analyses from across the cryptocurrency markets for the first three months of 2018.
ICORating is staffed by a team of 50+ in-house analysts with experience at hedge funds, investment banks, consulting groups, venture funds, and more. The company regularly evaluates ICO projects and releases reports on the industry.
The Q1 2018 report highlights the most significant trends in the ICO world. The company summarized the report by saying,
“We have tried to widen and deepen information on the market in order to give readers more understanding of current trends in the development of the industry.”
The report also mentions that a key market trend in 2018 has been “a sharp increase in the share of institutional capital and a decline in the number of private investors.” This leads to a situation where project requirements increase and the funds raised during an ICO depend on how well projects co-operate with investment funds.
In other words, it brings a new layer of legitimacy and responsibility to the world of ICOs.
Keep reading to discover some of the most notable information from the ICORating report for Q1 2018. Or, you can view the full report in PDF form (link at bottom).
ICOs Raised $3.3 Billion in Q1 2018
One of the highlights of the report was its total reported fundraising. A total of $3.3 billion was raised across the ICO industry in Q1 2018. Money was raised from a total of 412 projects. That’s a slight increase over Q4 2017, when $3.15 billion was raised across the industry. 5% more money was raised from ICOs in Q1 2018.
This brings the total amount of money raised from ICOs in the past year to $6.184 billion. It’s important to note that Telegram’s ICO, which raised $1.7 billion, was not included in this figure.
50% of ICO Projects Collected Less Than $100,000
Only half of ICO projects were able to raise more than $100,000. The quarter also ended with a decline in funding in March compared to the previous two months.
The Average ICO Period is Getting Longer
The report claims that ICOs typically lasted about 30 days last year. In Q1 2018, however, ICOs were more likely to last 2 months, on average. Many ICOs also scheduled a 60 day token sale, only to raise their target funds in the first day.
25% of Projects Have No Legal Entity Before Launching an ICO
Typically, a company will register as a legal entity before launching an ICO. The ICORating report, however, shows that approximately 25% of all projects in Q1 2018 (109 projects out of 412) had no legal entity at the time their ICO launched. That means they had no registered as a corporation or similar entity in any country.
Certain Industries Were More Popular than Others
The most common ICOs were for exchanges, financial services, gaming, and blockchain infrastructure. These were the same popular industries featured in the majority of ICOs from 2017 as well.
Half of ICOs Have No Development Prior to Launching their ICO
One of the biggest red flags for an ICO is a lack of development. It’s easy to promise to solve enormous problems in the whitepaper, but it’s hard to actually execute those solutions.
Nevertheless, 46.6% of ICOs from Q1 2018 had no development before their ICO campaign began. On the positive side of things, 9% of projects had a functioning business before their ICO, which indicates that real, existing businesses are starting to use ICOs as a source of fundraising.
$28 Billion is Being Managed by 119 Crypto Funds
There are a total of 119 cryptocurrency funds active within the industry. Those funds collectively manage $27.8 billion. 40% of these funds, according to the report, do not publicly disclose information about their asset management strategies or the names of their CEOs. 9 crypto funds also closed down in the first quarter of 2018, including notable names like Crowd Crypto Fund and Alpha Protocol.
The Top 20 ICO Campaigns in Q1 2018
As mentioned above, the $1.7 billion Telegram ICO was not included in this latest report, nor was the ICO for HT (run by Huobi). That’s because these companies did not have a truly public round for their token sales. However, the report outlined the top 20 ICO campaigns of the quarter based on the amount of funds raised. The top five ICO campaigns included, in order:
How Did Tokens Work in Q1 2018?
Tokens played a variety of different functions for projects in Q1 2018. Some of the core token functions included:
- Vote tokens that confer voting rights to holders
- Cryptocurrencies that function as transferable, cryptographically-secured digital tokens with no exceptional properties
- Security tokens that come with promises of dividend payments, company shares, or credits
- Reward tokens used to reward contributors to the network
- Service token used to pay for services internally within the network
- Utility tokens that play a crucial role within the platform itself
- Hybrid tokens that blended multiple functions listed above
ICOs by Geography
ICOs were prevalent in industrialized countries worldwide. Certain regions were over-represented based on their status as tech hubs – like Switzerland, Hong Kong, and Singapore.
The United States led the way with 59 projects (for a total of $583.8 million raised across all projects) in Q1 2018, followed closely by Singapore (34 projects for $468.1 million). Other notable names on the list included the UK (26 projects for $99.7 million), Switzerland (14 projects for $268.2 million), Russia (13 projects for $20.8 million), Hong Kong (13 projects for $82.1 million), China (9 projects for $202.1 million), Canada (9 projects for $16.6 million), and Australia (6 projects for $30 million).
Slovenia, Poland, Lithuania, India, South Korea, Indonesia, France, and other countries were also well-represented in ICOs in Q1 2018.
In total, 46.6% of raised ICO funds were allocated to Europe-based projects or teams. 25.33% were allocated to Asia-based projects, and 24.68% were allocated to North American projects.
Ultimately, the ICORating report provides valuable insight into the growing industry of ICOs. You can view the full report on ICORating.com here.
Also make sure to check out another new study that came out about cryptocurrency use, knowledge, gender and education here: