The ICO boom that has been observed on the market in recent months is due to high volumes of investment attraction, coupled with relatively low complexity. Apparently, now is the golden time for startups, when the combination of these factors is optimal. We will see if this is true for investors who want to repeatedly recoup their investments in profitable ICO projects in this article.
If you look at past years, you can see that it was easy to conduct an ICO – for those who even knew what it was, but the amount of funds that could be raised during the campaign was low with rare exceptions. This was also explained by the poor awareness of potential investors about the new phenomenon, as well as their caution as to whether investments in the ICO are the right decision in general.
Then people understood what ICO is profitable and began to look for the same profitable projects. Erroneously or not erroneously, but they massively incurred money to startups, and those, having discovered that it was possible to collect a lot of money, began to organize ICO one after another.
Now the required amounts, which are often calculated in seven-digit numbers, start-ups can sometimes attract in a matter of seconds – in the literal sense. An example of this is the Brave browser, which contrived to collect $ 30 million in 30 seconds. There are many examples when millions of dollars could be collected in 15 minutes of an ICO. IPO and traditional crowd funding did not stand close.
Traditional methods of raising funds lose to ICO in terms of complexity. Company registration, taxation, the provision of guarantees to investors – all this seems to be waiting for an ICO in the future, at least in some countries, but for the time being is an optional component of the campaign.
The holding of ICO has recently become more complicated in financial terms, but for the time being the campaign can be carried out by a start-up who does not have transcendental sums. In particular, he can collect a part of the amount in a pre-sale, especially if he has some achievements that can be presented to the investor.
Now in the ICO sphere, that is the time when everything is relatively fast, simple and without any regulation, so start-upers actively use it.
Venture capital firm Mangrove Capital Partners conducted a study of ICO profitability in October 2017. The base became 204 completed campaigns, and among them were the super profitable, and not so much, and even those that brought a loss to investors.
The profitability of some ICOs is tens of thousands of percent, and against such figures, even high risks, a loss ratio of at least a quarter of ICO and a not very high probability of getting on a truly successful project do not stop investors.
The motives of many are expressed in the slogan of the ICONOMI management cryptocurrency platform, offering “super-profits that were impossible in the conditions of the old economy.
In the case of an IRO, even with a large investment, the investor can wait for profits for years. It is possible to get income for several months in ICO, which will exceed the income from IPO by tens, if not hundreds of times.
If investing $ 10 in traditional investment projects does not make sense (and in many cases does not work because of the input barrier), then investing such an amount in the ICO can be quite cost-effective if tokens cost, say, $ 0.02 per piece. The possibility of multiple profits covers the risk of losing $ 10.
Some investors believe that the traditional economy schemes in the 21st century do not work and they are looking for alternatives. The most obvious is a crypto-economy with its decentralized system, and the most profitable ICO projects only strengthen the belief that following these successful examples there will definitely be other – the only question is to find them and invest in them.
Strangely enough, as of today, none of the most profitable for investors ICO has attracted funds for the development of a startup that would be associated with something completely far from the blockchain – with a toy store or something like that.
ICOs, which were held on their own platforms, show greater profitability compared to other ones. If we consider other platforms, then the largest number of profitable ICOs was based on Ethereum, then Counterparty and Omni go further. However, for projects that were conducted on the basis of fairly popular Waves and BitShares, the average performance is worse.
However, these are rather curious statistics, because if you consider each project individually, then almost each of at least a dozen of the most popular platforms has a profitable ICO for investors and this unifying factor is more questionable as an indicator of profitability than the above mentioned.