More Than Two-Third Of Small Cap Tokens Are Trading Below ICO Price
Over 70 percent of the current small-cap cryptocurrencies are trading below their ICO prices, according to a recent report.
Over 70 percent of the current small-cap cryptocurrencies are trading below their ICO prices, according to a recent report by Diar research.
Small-cap cryptos losing their value
The current downturn in the market has affected the prices of cryptocurrencies, but from the look of things, small-cap tokens have suffered the most.
A new study conducted by crypto research company Diar revealed that nearly 562 ICO tokens are currently ranked outside the top 100 biggest cryptocurrencies in terms of market caps.
The research pointed out that these tokens have collectively lost around $5 billion in nominal value when compared to the original value of the tokens during their respective ICOs.
These statistics become even more astonishing when considering the drop in value doesn’t include the value of the tokens that the development teams of the projects reserved for themselves.
The research shows that Sirin Labs token was the biggest loser, losing over $140 million of its value since its ICO in the face of tough competition in the blockchain phone market.
HTC has finalized plans to launch its own blockchain phone, called the HTC Exodus, which is expected to provide serious competition for Sirin Labs.
It is followed closely by PumaPay which has lost $102 million of its value since the ICO was conducted.
The report showed that 324 tokens were able to raise $2.3 billion collectively during their ICOs but have yet to be listed on any of the top 100 cryptocurrency exchanges.
In addition to that, 44 ICOs raised around $1 billion combined but have only been listed on at least one major exchange. Despite that, they still don’t have any trading volume on the platforms.
ICOs have raised $20 billion this year but face declining growth
Despite the bear market, ICOs have enjoyed an excellent year. Data pulled from CoinSchedule revealed that 789 ICOs have taken place so far this year, and they have collectively raised roughly $20 billion.
High-profile ICOs such as Petro, Telegram, and EOS were responsible for the large amounts raised by ICOs this year, which has tripled the $6.7 billion raised in the entirety of 2017.
The amounts raised by ICOs have, however, declined each month. In March, ICOs raised $2.95 billion, but in April, ICOs have been unable to cross even the $1 billion mark, with the figures continuing to decline since then.
In August, the ICO market hit a new low, raising just $191 million, with the bear cycle catching up to the ICO market.
A drop in ICO investment could be attributed to the general negative sentiment around them, as well as poor market performance and the risk of fraud.
Boston College Carroll School of Management published a report which revealed that 56% of ICOs fail within four months, leading to investors becoming more cautious about the ICO projects they invest in.