ICOs are having a tough time right now – only 23% of the projects actually reached their hard cap (maximum funding amount) in November 2017. Why is that?

Have the best times of ICOs already passed?

While back in June 2017 more than 90% of the projects reached their hard cap, the portion of ICOs hitting their cap continuously decreased from June to November. It seems like the best times have passed – but why is that?

ICOs: Survival of the fittest

The huge rise of interest in cryptocurrencies and ICOs in mainstream audiences has not only led to bigger amounts invested into projects, but also to more projects and tokensales entering the market – trying to gain from the current traction in the market. Therefore, the projects competing for the investors’ money is much higher. See my downloadable report for details.

This leads to a market where only the best ICOs can survive further – rapidly sorting out less interesting projects.
Download the report

Investors want to see results

While 2017 was a lucky year for many investors in ICOs, it seems like investors are acting more rational in 2018. Last year, it was not a tricky thing to find an ICO that rose in price after the tokensale – although most of the projects have not really reached another milestone or published a market-ready product. It was hard to determine which parts of the value increases were delighted to speculation and which were based on real “value” created.

The difficulty of evaluating the value of an ICO

Many of the valuation techniques rapplied to usual business models of startups are not really applicable for ICOs – the model of decentralized platforms does not really fit into these frameworks. Therefore, most investors are rather making an educated guessing when investing than a math-based decision.
This evaluation difficulty may have made it easier for some projects to attain the money of believers into the project. Although, investors are looking for the fruits their investments are bringing them now – sooner or later the actual results will show up and it will be possible to validate previous promises of ICOs. Everything before has been an estimation – now tangible results are showing up.

In which direction are ICOs heading now?

Apparently, it is getting harder for projects to attain investors’ money – therefore, we will see an increasing number of projects that are getting funded through ICOs, but at the same time a much lower share of successful projects than e.g. in earlier 2017. The overall invested money was rising rapidly and so were the projects. In the future, only the best projects will have a chance and both investors mindsets as well as regulation will kick out small ICOs and shaky ones out of the field.

Download my free report (one click) about ICOs in 2018 – with a lot of data and statistics.