Initial Coin Offerings have become increasingly popular as the price of cryptocurrencies is staying high. According to ICO Rating, over 1,200 ICOs took place in the first six months of 2018. However, only around half managed to raise more than $100,00. Moreover, only 150 ICOs managed to have their tokens listed on a crypto exchange. It’s also worth mentioning that more than half of all ICOs actually failed in the second quarter alone. Therefore, even though the ICO market has grown quite dramatically in the last couple of years, investing in ICOs has also become riskier. Nevertheless, a number of projects stand out as the best ICOs of this year due to their stellar returns.
More ICOs Means More Risk
The problem with ICOs is that it’s difficult for investors to assess their profitability. Because the ICO market is unregulated, a lot of projects can post misleading information. Moreover, many projects that file for an ICO are still at the idea stage. This makes it more difficult to analyze them. For example, in the second quarter, less than 2% of all ICOs have either a fully-developed product or at least the code written. Additionally, 9% and 9.9% of ICOs are in alpha and beta stages, respectively. Interestingly, most money are raised by ICOs that have a Minimum Viable Product. With 20.5% of ICOs claiming an MVP, their mean amount of funds raised in the second quarter stands at $34.5 million. ICOs with a product in beta is on the second spot, with a mean amount of funds of around $8.0 million.
People invest in ICOs in the hope of making a profit. However, as the number of offerings went up, their average return dropped. According to ICO Rating, if in 2017, the median return from ICOs stood at 117%, in the first quarter of 2018 that figure declined to 49%. In the second quarter, the median return on investment from ICOs was a negative 55%. At the same time, in the first and second quarter, the amount of ICOs that traded below the offering price was 89% and 75%, respectively.
Nevertheless, among all ICOs that disappointed investors, there are several that performed strongly so far this year. With this in mind, we have compiled a list of the five best offerings of 2018. We picked the ICOs not based on the amount they raised, but by their performance since the tokens started trading on an exchange.
Digitex conducted its ICO on January 15. It issued 1.0 billion DGTX coins and offered for sale 700 million of them. All coins at $0.01 apiece were sold within minutes, raising over $5.0 million for the project. Digitex Futures aims to build a Bitcoin futures trading platform. The platform will use blockchain technology to eliminate fees and decentralize accounts. According to Digitex’s website, the platform will create demand for DGTX tokens because all transactions will be conducted in the native cryptocurrency. Based on the project roadmap, plans to finish the development of the futures exchange this quarter and launch it in the last three months of 2018. Given that the idea of Bitcoin futures has been very popular, users clearly anticipate that Digitex will find its niche. In this way, the price of DGTX tokens has surged by 250%.
Consentium is a cryptocurrency wallet and chat app that allows transfers of cryptocurrencies. The app is currently in beta on Android and available in a bunch of Asian countries. The team behind the project plans to add a chat community monetization model. This will allow users to earn tokens through various in-app activities. Consentium ICO was completed in May, with the project selling all 168,000,000 CSM coins that it offered. The ICO price was $0.25 per token, but since CSM price surged to $1.48. This represents a return of nearly 500%.
Scroll Network also has seen its token price surge by around 600% compared to the ICO price of $0.01. Scroll represents a blockchain-based data storage and transfer system that allows users to pay only for services and storage space that they need. The SCRL tokens allow paying for services and transfers. SoluTech, the company behind Scroll Network is currently working on its first product within the Scroll Network. The product, SlideDrive, allows users to transfer encrypted files and it is currently available in a beta version.
Holo’s ICO took place between the end of March and the end of April. The company plans to release a total of 250 billion HOT tokens, with 75% available for the community and 25% for the organization. Currently, the available supply is around 133.2 billion. The HOT’s ROI since the ICO stands at a whopping 1,200%. Holo is a decentralized cloud hosting platform that allows running distributed applications. Holo is built on Holochain, which is a more efficient version of the blockchain. Holochain doesn’t have its own cryptocurrency, but allows running applications with other tokens and just monitors accounts to prevent fraud. The team behind Holochain expects it to be 10,000 more efficient than Ethereum.
BriaCoin is the provision of smart contracts that are part of Briastorm. Briastorm is an ad network of blockchain-based products and services. BriaCoin includes a cryptocurrency exchange, a payment system, provides advertising services and Social Media Optimization and Marketing services. All activities are paid in BriaCoin tokens, BRIA. BriaCoin ICO took place in June and July and since the offering, the BRIA token surged by 1,800%.
Are ICOs Right For You?
These ICOs show that even though the mean ROI on the ICO market dropped dramatically, there are still quite a few projects that deserve the attention of investors and can generate strong returns. However, it’s difficult to assess how sustainable their growth is over the long-run. That’s why due diligence is important not just with ICOs, but even when investing in tokens that have performed very well since started trading.