BitMex research suggests that ICOs have almost broken even
The Cryptocurrency market has not shown any signs of improvement despite some underlying positive news. One of the most significant casualties of the recent downturn has been Ethereum. The price of ETH is currently hovering around $225 USD, which is more than 70% lower than the all-time high it had in December 2017.
One of the proposed explanations for this is that the biggest holders of Ethereum are likely to be projects which raised funds in ETH. The theory is that these projects are likely to unload their fundraised ETH shortly after their token generation event ends.
More recently, a report by BitMex suggests that the opposite is infact true. The decline has not caused ICOs to shift their interests. Rather than sitting on losses, ICOs are currently sitting on around $93 million of unrealised profits.
The researchers at BitMex and TokenAnalyst found that ICOs have cashed out just as much as they have raised. This means that many of them are close to the break-even point. There were a total of 222 projects included in the report, and as a collective, they had raised $5.5 billion. Crucially the BitMex report stated that "As a tool to raise funds, the ICOs have been a phenomenal success, to such an extent that even a further significant fall in the value of Ethereum will barely make a dent into the success." This shows that while the Cryptocurrency market may be in a down at the moment, the relative health of ICO projects is still good with a positive outlook ahead. The report stated that the net profits of the projects they analysed were closed at $727 worth of realised gains.
The report also stated that "As a tool to raise funds, the ICOs have been a phenomenal success, to such an extent that even a further significant fall in the value of Ethereum will barely make a dent into the success." This shows just how well the funding mechanisms have gone for ICOs. The report makes it clear that there has been no panic selling from ICOs as had been widely rumoured. However, there are likely to be tough and testing times ahead. Diar has painted a frank assessment of the current climate for ICOs. "Outside the Top 100 cryptocurrencies being traded, there is a $5 Billion shortfall against the total amount raised during an ICO for the 562 tokens with reliable information about their fund-raising. 7 out of 10 tokens that are sitting below the screen fold have valuations that are now under their initial raise." This assessment showcases the reality that ICOs now have to face. It appears to be a situation where some will sink while others will swim.
While the current landscape of the Cryptocurrency may be harsh for some, Ethereum continues to receive praise from highly influential CEOs and investors. Analysts have predicted a bullish trend for Ethereum by the end of the year. Some have even stated that we could see its price rise as high as $1800 by 2019. One thing that this BitMex report has shown us is that ICO's are not feeling the brunt of this current bearish trend that surrounds the broader market.