Seven out of every ten initial coin offerings (ICOs) are currently underwater, meaning that 70% of altcoins funded with an ICO are trading below their initial launch price.
According to a recent report published by Diar, a market research group that used data from TokenData.io, tokens outside of the top-100 list are currently facing a $5 billion shortfall against the total amount of funds raised during ICOs. Of the 562 tokens analyzed, only 30% currently have valuations above their initial raise.
On top of the falling price action of post-ICO tokens, the total number of successful ICOs sits at 52-week lows while the capital raised from these sales hit a 16-month low in August.
Diar notes that significant market trends, in addition to poor capital management, have facilitated the significant drop-off in market value for most tokens. Additionally, a whopping 324 tokens have completed ICOs, but yet to be listed on any public exchange.
While the current ICO landscape is certainly brutal, some industry leaders are waiting to see how things develop.
For instance, Andy Bromberg, the co-founder and president of CoinList, a platform for digital asset companies to manage their token sales and for investors to discover high-quality projects, believes that the ICO ecosystem is still in its infancy and that it is far too early to properly gauge outcomes.
Nonetheless, time will tell whether this highly volatile form of fundraising will sustain, especially with mounting regulatory pressure.
Interesting: CoinList Co-Founder Believes the ICO Ecosystem Is Still Early, Difficult to Gauge Outcomes
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.