If you invested in a first coin offer (ICO), a crowdfunding tool for crypto-related companies, there is a very good…
If you invested in a first coin offer (ICO), a crowdfunding tool for crypto-related companies, there is a very good chance that your portfolio has been broken, according to Ernst & Young’s research. 19659002] In a report of 19 October entitled “ICOs, The Class of 2017-one year later”, Ernst & Young said during the first six months of 2018 that 86% of the leading ICOs listed on a crypto exchange in 2017 below their first listing price. In addition, a portfolio of these ICOs has been reduced by 66% since the peak of the market.
A lack of investors due diligence and poor understanding of the emerging and often dishonest market drove ICO values to extreme levels and created a serious case of FOMO (fear of missing), which eventually emerged, the report found. “Despite the recent hype around ICO, there seems to be a significant lack of understanding of the risks and benefits of these investments,” says Paul Brody, Ernst & Young, world-leading innovation leader, Blockchain.
“Although ICOs are a brand new way of raising capital, participants should understand that there are factors such as slow development towards labor product offers ̵
1; which could introduce greater risks in ICO investments.”
This excessive risk shows that the total value of all crypto curves rises to more than $ 800 billion in January before nose diving below $ 600 billion as the price of big crayons as bitcoin
BTCUSD, + 0.76%
ETHUSD, + 2.14%
lost more than half of their value.
Read: The market for kryptocurrency has shed more than $ 600 billion from its peak – what happened right now?
Ernst & Young also estimates that 30% of all ICOs have lost “substantially all value.” This follows a February survey from news.Bitcoin.com who said that 46% of all 2017 ICOs failed with either the funding or the business phase.
Additional reading: Almost half of all 2017 ICOs have failed
But investors seem to increase. Regardless of regular monitoring or documented failures, the money will decrease to the alternative crowdfunding tools. Of the $ 21.4 billion raised in 2018 so far, $ 17.2 billion was in the first six months. July, August and September were three of the five longest months, according to CoinSchedule data.
Money raised from ICOs
Read: ICO fraudsters have disappeared about $ 100 million in investment funds, says research company
. Yet Brody said that those who are considering a dabble on the ICO market should be cautious. “Currently, the level of reward in this market does not look as it justifies the risks,” he said.
The survey collected data on projects that have carried out the ICO and conducted a detailed analysis of the 141 largest projects, which collected 87% of all ICO revenues, between January 2018 and September 2018.
Read:  Some of the investors’ worst fraud is about ICOs supported by Pennstudie
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