As 2017 was the year for Initial Coin Offerings (ICO) 2018 is also the year for them but in a different light. You can trace the boom in ICOs directly to the rise of Ethereum (ETH) and now as ETH has lost more than two third of its value, many surviving ICOs are liquidating large sum of ETH. As reported by News.bitcoin.com the cashed out figure stands nearly to 433,000 ETH ($52.5 million) this month alone, which is highest compared to any other month in 2018.
Last February, a report published by news.bitcoin.com points out 46% of 2017 ICOs failed miserably and they had a failure of 92% a few months ago.
A recent report from the Wall Street Journal reveals after an in-depth analysis, how ICOs used the trending tools of cryptocurrency and blockchain to construct frauds and scams to deceive investors.
Now, as most of them have failed and remaining are thriving to survive this bear market cashing out there remaining asset to support their projects. A report from Diar explain this as “Ethereum has dropped 84% in price from the start of the year when ICOs treasuries saw massive activity with withdrawals being the highest they were ever this year.”
Further, the research report points out that in November withdrawal 290,000 ETH was the second after this month. Specifying the details it says, Tezos withdrew 82,000 ETH and Aragon moved 40,000 into Dai, an ETH stablecoin. After December and November’s record withdrawn January comes third with 232,000 ETH reported as withdrawn.
Diar explains “As a whole, 24 percent from the start of the year has moved from the 100 wallets assessed […] But what was worth $3 billion is now only $350 million.”
In its report, Diar included a detailed spreadsheet with 50 highest grossing ICOs and compares with how much money they started the year with and how much that they withdrew by the end of the year. Some big names like Golem, Tezos, Digizdao, Filecoin, and Polkadot are mentioned in Diar’s informational table beside stats of treasury holdings. It shows Filecoin withdrew its entire holding of 216,906 ETH this month, which covers nearly half the withdrawn amount.
The report also highlights the difference in the withdrawal rate, on average it was around 2.4% which jumped to 12% in December exceeding the rate from any other monthly.
As the last two month are happen to be the worst for ETH, and withdrawing now shows these projects are struggling hard to sustain.