New study finds half of ICOs fail within first four months


Around 56 per cent of crypto start-ups which raise money through token sales fall through within four months.

That is the latest finding from a study carried out by Boston College in the US on 2,390 initial coin offering or ICO.

The researchers analysed the frequency of tweets from start-ups to surmise which were still active.

This approach suggests to the researchers that only 44.2 per cent of startups are still active 120 days from the end of their ICO.

“What we find is that once you go beyond three months, at most six months, they don’t outperform other cryptocurrencies,” said finance PhD student and assistant professor at Boston College’s Carroll School Leonard Kostovetsky, one of two researchers in the study.

“The strongest return is actually in the first month.”

“They are much lower now, so I wouldn’t expect them to continue to decline at this rate,” he said.

“People often look at returns and say this is a great deal, but we teach in finance that return is a compensation for risk,” Kostovetsky added.

“These are stakes in platforms that have not yet been built, that have no participants yet. There’s a lot of risk. The majority of ICOs do fail.”





READ SOURCE

READ  SEC Pays Attention to Cryptocurrencies, Blockchain Technology & ICOs

LEAVE A REPLY

Please enter your comment!
Please enter your name here