Study: Ethereum ICO project teams have “made out like bandits”

Ethereum-based ICOs have sold as much as they have raised, according to a new report from crypto trading platform BitMex.

The study looks at the exposure of ICO accounts to Ethereum price fluctations, and concludes that the impact is less than may have been thought. As a result, these projects “made out like bandits”, and further price drops will not dampen this success.

The abstract reads: “We look at the amount of Ethereum raised and the US$ value of the gains and losses caused by changes in the Ethereum price, for each project. We conclude that rather than suffering because of the recent fall in the value of Ethereum, at the macro level, the projects appear to have already sold almost as much Ethereum as they raised (in US$ terms).

“The theory being that many ICO projects were sitting on a large treasure trove of Ethereum and that as the price of Ethereum fell, these projects were going to ‘panic sell’, fearful of being the last project holding their Ethereum bags. Our analysis, along with the team for TokenAnalyst, shows that on a macro level, the above theory may not be applicable.”

Of the over 200 projects looked at for the study, $5.5 billion of Ethereum was sold for almost the same amount with a loss of just $11 million.

Despite the amazing results of these projects, however, the study does pose the question of whether there’s any point to the ICOs in terms of useful services and/or products. Moving forwards, researchers conclude, these projects will need to compete over resources and developers made more valuable by their success.

Still, the report adds, “of the Ethereum still held by the projects, even at the current price, projects ares still sitting on unrealised gains, rather than losses.”