Boston College Publishes New Study On ICO Success Rates

The brand new study, published by Boston College says that on 44 percent of ICO’s belonging to cryptocurrency projects survive later on. Professor Leonard Kostovestsky and Hugo Benedetti both wrote the study, researching over 4000 initial coin offerings responsible for a $12B capital raising since the beginning of 2017 and up to March of this year. 

Collected Data

After information on ICO data was collected, researching ICO ratings, drops and more, the paper stated that ICO's continue struggling due to an early stage market. According to the paper, returns from an ICO’s token sale is on average 179% through 16 days of holding. 

More information displayed in the paper explained that an average of almost $12 million is the rate at which ICO’s raise profit although much larger initial coin offerings intervenes in the numbers. As a median, raising around $4 million on average is a closer detailed look into the figures. 

The study notes that 48% of concluded initial coin offerings essentially survived and announced gathered profits of over zero. Many factors come into the study as well. In regards to the other 52 percent of initial coin offerings, only a handful of them has raised enough funding to continue operating and some have not disclosed how much revenue they’ve gathered. Among the 52 percent were also those that fell victim to initial coin offerings and the large rate at which many of them are fake and promoted simply to steal investor funds.

Social Media

Further study into the paper highlights an important factor involving Twitter, ICO’s and their chances of successfully launching and concluding. As the paper reveals, on average, after an announcement is made by an initial coin offerings account on Twitter, it launches eight months after. 

The paper compares activity on Twitter and the success of initial coin offerings, displaying a small connection between extended activity on Twitter and the success rate of ICO token sales. On average, a listed coin offering is usually announced around nine months prior to launch and a four-month median. Pre and post-initial coin offering Twitter activity display a robust connection as well as the number of funds raised. The study stresses that this is a possible relationship and is not a direct cause.

On the other hand, initial coin offerings with no presence on Twitter display an astounding and complete failure of 100%. This also points to how active an initial coin offerings Twitter account after its conclusion can be a good display of a successful ICO. In conclusion to the study, the researchers stated that startups have a 44 percent continued success after a four-month period.

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