Albeit the bursting price of Bitcoin in 2017 was the reason that many companies started to hop on the cryptocurrency bandwagon, most of their ICOs seemed risky from the outset. Well, turns out they really were. In a study of ICOs tracked by Tokendata, Bitcoin.com has found that despite raising over $104 million, 46% of the 902 crowdsale-based cryptocurrencies are already dead. Of these, 142 never got sufficient funding, and the further 276 have either faded away slowly or have failed due to taking the money and running.
In practice, the number casualties might be higher. There are another 113 ICOs, which can be classified as semi-failed. It’s because, either they have stopped communicating on social networks, or their success is very much unlikely because their community is so small. And the condition of the survivors isn’t anything better. Some of them raised a couple of thousand dollars, and a handful raised over $10 million, leaving the rest into an uphill battle.
It can easily be understood why these cryptocurrencies failed. Besides the scams, a huge portion of them were aimed at niches like freight trucking, dentistry, or real state, which were never going to draw the attention of broad audiences.
While ICOs are still popular options, there’s no reason to expect that the new wave will fare any better. With the increased competition, reduced returns, and a never-ending stream of opportunistic ICOs, investing in cryptocurrencies is still riskier than ever.