This year has ushered in a massive ICO growth, with 2018’s pre-sale launches already raising an astonishing $2 billion worth of funds, a marked increase that will evidently exceed beyond 2017’s total sale of $5.7 billion.
As has been observed in recent years, a vast majority of ICOs have been pivoting towards private investors, with 84 percent of 2018’s pre-sales launched via exclusively held ICO fundraisers.
At the onset, crowdfunding was initially conceptualized to be a democratic method of raising funds, allowing for a diverse community of investors. However, in recent years, privately launched pre-sales have evidently been increased, with Basic Attention Token (BAT) notoriously known for selling out tokens in a matter of minutes. Today, public sales are generally regarded as an afterthought, with private investors mostly getting first dibs on the best privately held ICOs.
According to a recently released statistics on Tokendata, this year’s ICOs has generated over $1.97 billion investment, with $1.63 billion of which yielded from private investors. This accounts for 84 percent of the total investment in ICOs, notwithstanding the $850 million generated from the Telegram sale, a private fundraiser so exclusive that only the most elite of elites have access. The $600 million Telegram pre-sale will be closed by the end of February, however, private investors are already flipping their token allocation by twice as much, leaving platform users deprived of a stake in the project.
Based on Tokendata records, out of this year’s 94 ICOs, 28 of which already have tokens for exchange trading. At press time, tokens purchased through ICOs yield an average of 2.17x ROI when sold on an exchange, with ETH profiting just 0.75x ROI. At this rate, holding onto ETH would have generated more revenue than it would if it were swapped for tokens.
Nonetheless, investors would find it easier to generate a profit compared to public sale investors, largely due to significant crowdfunding discounts. On paper, ICOs appear to be gaining a notable traction. But point in fact, only 1 percent of elite investors stand to benefit from these crowdfunding projects.