59% of 2017’s ICOs are either dead or about to be
The average life expectancy of a cryptocurrency project post-ICO might be under a year.
What are the odds of that ICO taking off? Considerably less than 50% it turns out. In fact, that project and your money will probably be gone in less than a year. Bitcoin.com analysed 902 token ICOs registered on TokenData in 2017, and discovered that most of them were either dead and gone, or about to be, by early 2018.
The money they raised between them is also gone. The now or soon-to-be dead groups reportedly picked up $233 million equivalent between them.
- Died after funding stage. They raised money and moved onto the next stage before going away. This group also includes the many exit scam ICOs which are estimated to account for about 10% of funds raised.
- Died in funding stage. They either raised no money and simply disappeared, or raised some money and simply disappeared anyway.
- Soon to be dead. These are coins in a coma, that Bitcoin.com determined to be without any real development or userbase, but which are still a bit too warm to call dead.
- Alive. Not dead. Yet.
Sometimes an ICO will cross multiple categories over the course of its death time. The infamous Kodak ICO for example was the reborn and rebranded version of an ICO that previously died in its funding stage.
Other times, even a deceased coin might go on to live a long and full death. For example, the PetroDollar coin was reincarnated when confused buyers mistook it for Venezuela's national Petro cryptocurrency. And some of the soon-to-be-dead coins that Bitcoin.com listed ended up saying that rumours of their death had been greatly exaggerated. Appropriately, the Neverdie token was one of these.
There are thousands of cryptocurrencies in existence, so it's an extremely competitive space. It's also likely that many of the top 20 mainstays of today will be dying off in coming years as the market consolidates and more tokens start seeing real world use. It's not possible to predict which ones will survive with complete certainty, but some experts have suggested that it's worth focusing on the actual token application.
If the token itself doesn't do anything that another coin can't or isn't tied to a uniquely valuable ecosystem, experts say, a token might inevitably be eaten by one of its more robust and versatile competitors. At a glance it looks like five or six of today's top twenty coins by market cap might be destined for this fate. Which ones those are might depend on what you see in a project, and distributed ledger technology in general.
A lot of money and effort went into building today's coin graveyard, and only a small proportion of 2017s dead coins were set up to fail from the start, so there are certainly plenty of different opinions on what makes a good project.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, SALT, BTC