Is the ICO Fever Over?

When we last looked at the ICO (Initial Coin Offering) scene in May 2018, the market had just hit a new monthly USD 7 Billion all-time high (please see the note at the end of the post). There were some fraudulent offerings and other warning signs, but the ICO fever was raging. Even the strong Bitcoin price correction in January 2018 did not seem to dampen the enthusiasm.

Bitcoin Price Development

Development of Bitcoin price 2016-2018. Source: TradingView

Revisiting the ICO scene

In light of the most current data available, Q1 of 2018 seems to have been the height of the ICO bull market. According to the latest dataset released by Elementus, ICO volumes have come down significantly since the Q1 peak. The latest reported month was August 2018 with a volume of just under USD 1.5 Billion raised.

Elementus September

Monthly ICO volumes for 09/2016 to 08/2018. Source:

Not only have the volumes come down significantly, but also the percentage of successful ICOs has come down drastically. While over 80% of ICOs were successful in mid-2017, this number had fallen to just over 20% by August 2018.

Success rate

ICO success rates from mid-2o17 to mid-2o18. Source:

It looks like investors have become more selective as the market matures – or, alternatively, the number of low-quality opportunistic ICOs has risen but they have been rejected by investors.

The last interesting nugget is the shift in the geographic distribution of ICOs – Singapore was the #1 in the number of ICOs in August 2018 (although by a small margin only). Time will tell whether this shift is a blip on the radar or something permanent. If the shift is due to the increased regulatory scrutiny in the US, it might very well be a permanent one – at least until the regulatory pressure grows in other markets, as well.

ico fundraising by country, august 2018

Singapore is the new ICO leader. Source:

The Nexit Take

So, are we nearing the end of ICOs? No, we don’t think so – the market is merely maturing: 

  • A year ago ICO volumes seemed to be growing exponentially and some of the boldest visionaries predicted this to lead to the fast destruction of the traditional VC model.
  • The fever has now abated and ICOs are carving a niche for themselves as a part of a larger spectrum of crowdfunding mechanisms. In fact, if we compare ICO dollar amounts to combined reward and equity crowdfunding, they are roughly in the same ballpark. 
  • ICO activity levels have stayed and are likely to stay far below actual VC investment volumes: $207 billion invested in 14,247 VC deals globally in 2018.



A note on the data

The USD 7 Billion figure mentioned at the beginning of this blog entry was sourced from a data set published by in May 2018. Somewhat puzzlingly, their latest research has downgraded that amount to just below USD 3 Billion. For your reference, below find the two ICO volume charts published by Elementus in May of 2018 and September of 2018.

Elementus data from May 2018

Elementus September data from September 2018

One possible explanation is the use of different cryptocurrency exchange rates in the two datasets. We have reached out to Elementus to inquire what is the reason behind the large variation of numbers and will let you know when we find out more.


* The title image is courtesy of JD Hancock under a Creative Commons 2.0 license.

Artturi Tarjanne