IEO Review: 87 Crypto Projects Raised Over $300 Million, 62% Have Negative ROIs
As bitcoin price stops climbing and tumbles below the $8,000 mark in the past few weeks, analysis that bitcoin prices dip under $5,000 and bitcoin scam claim are coming back on the table.
It’s hard to predict whether bitcoin will dip below $5,000, but investors condemning cryptocurrencies are a massive bubble could find evidence for their claims – more than half of the IEO projects that took off in the first half of 2019 have failed to generate profits so far with some even run away with the raised money.
Following the initial coin offering (ICO) craze in 2017/18, initial exchange offerings (IEOs) started by crypto exchange Binance have taken 2019 by storm. While after the frenzy is an awkward truth – the median IEO return is -45% and constantly dropping under the current circumstance; 41 (47%) out of the 87 IEOs have lost more than 50% and there’re even 3 IEOs dropping to almost zero with 99% loss.
According to data from cryptorank, the 87 IEOs that went online on 17 crypto exchanges have raised over $300 million. Of the 17 exchanges, only six have positive average returns. The big name exchanges have been performing substantially better than the smaller ones. Binance, OKEx, Huobi are ranked in the top list in terms of IEO returns.
Binance, the IEO mode initiator, generates the highest average return of investment (ROI) of 98.76%; Gate.io, with the most IEOs launched on its platform, come next to Binance in term of returns (87.37%), and the third goes to OKEx with an average ROI of 63.08%.
On the opposite end, DigiFinex is the worst performer with the average current ROI standing 91.22%. Suppose you have put $100 into it, what you can now get is only $8.78.
The best performing IEO to date is Sero (SERO), generating 7.66x returns; followed by Matic Network (MATIC) at 5.56x returns and AIS (AIS) at 5.44x. Squeezer (SQR), StakePool (SKP) and Magnachain (MGC) are the three projects with the lowest returns. If you have invested $100 in these projects, you would now get only 1 dollar back.
As most IEO tokens’ purchase requires users to have a certain amount of exchange tokens in holding, it has resulted in a significant increase in the exchange tokens. Binance BNB ranks No.1 among exchange tokens and the 8th largest cryptocurrency by market cap. Probit token PROB and Gate.io’s GT are the two exchange tokens with the biggest price increase. However, GT has dropped 56.47% from its all-time high and PROB dropped 74.60% along with bitcoin’s price drop.
It seems that this exchange-supported model is following the old ICO model to begin to perform weakly. After IEO, more IXO may emerge, the pump-and-dump game will not stop there. For projects, leave returns aside, it will be better to see these projects bear real fruit; and for investors, be careful and responsible with your hard-earned money.