59% of last year’s ICO either went bankrupt, or close to it, or disappeared with money

The initial placement of coins (tokens) through smart contracts is one of the most popular scams of 2017. Not one "entrepreneur" last year disappeared without a trace, with hundreds of thousands or millions of dollars attracted from investors, who hurried to buy tokens at a discount during the pre-sale with a view to increasing their value. The last in this list was Cryptostartap LoopX .

But even with “honest” entrepreneurs on a crypto market, things are not going well. According to statistics from one of the largest ICO trackers TokenData , in total last year 902 ICOs were held. Of these, 142 failed at the fundraising stage, and 276 enterprises went bankrupt after that. That is, to date, 46% of all last year's ICOs have already ended in bankruptcy of enterprises - they have not lived even one year. Bankrupt companies collected a total of 104 million dollars ...

It is clear that investing in startups is a risky business. ICO statistics only confirm this.

Of the remaining companies afloat, 113 have the status of “semi-bankrots”. This status is assigned in cases where either management has stopped communicating with investors on social networks, or the community around the project is so small that it is impossible to make an assumption about the success of the business. It turns out that 59% of all startups that spent ICO last year either declared themselves bankrupt, or are close to this, or disappeared with depositors' money, which can be equated to bankruptcy. There are a total of 531 losers. Although it must be admitted that many of them looked doomed from the very beginning. Nevertheless, in total, these companies collected $ 233 million from investors.
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On the other hand, the most “authoritative” ICOs that have attracted the most funds feel normal (for now). This is logical: it is difficult to go bankrupt in the first months, if you raised from $ 50 million to $ 230 million in financing, you need to try very hard and be creative in your task. Today, the record among failed startups is The DAO (Decentralized Autonomous Organization), which raised $ 150 million in May 2016. Almost immediately after ICO, this company was hacked and the money was withdrawn, but as a result of the hard fork of the blockchain Etherium, the transaction was canceled and the money was restored to the wallets. However, subsequently, the trade in DAO tokens was stopped on many exchanges, and ICO itself received the status of Failed.

The largest failed ICOs of 2017 are Becksang (collected $ 37.784 million, October), Spheris ($ 37.618 million, October), Droplex ($ 20.566 million, August) and Rhea ($ 18.888 million, October).

Exploring the activities of bankrupt ICOs is a depressive experience, writes news.bitcoin.com : abandoned twitter accounts, empty groups in the telegraph, web sites removed from hosting. This is a kind of digital cemetery, a mass grave of startups that could not fulfill their promises and disappeared. Many people did not attract funds at all ($ 0 investment) and it is even strange how the tracker learned about them. Others collected a couple of thousand dollars and, of course, could not work with such a modest amount. Only very few bankrupts managed to attract more than $ 10 million. But their fate does not differ from those who drew zero: neither the minimally viable version of the product, nor the alpha and no contribution to the infrastructure of the “new decentralized cryptoeconomy”.

But there are optimistic losers: some of the startups that failed to raise money in 2017 will try to do it again in the new year that has come. Maybe now they are lucky more. One such example is the Doft truck reservation platform (a kind of Uber in the truck version). “The largest ICO on the heavy truck market”, as they say, will end on May 1, 2018.

If someone wants to invest in some company, then he will not have a lack of choice: every day, several ICOs. For example, on February 27, three ICOs are completed, and on the last day of the month - 62 at once, on March 1 - four, on March 2 - two. In general, the market is in full swing, not a day without a new ICO. But there are fears that in 2018, investment in ICO will be even more risky than in 2017. Competition among startups is growing, and the influx of investors is limited.