According to the latest research conducted by cryptocurrency exchange BitMEX, the total value of tokens issued by more than a hundred ICO projects have devalued by 54%, as compared to their initial aggregate value of $24 billion.
BitMEX has joined forces with analytics firm TokenAnalyst to analyze the ICO market. While conducting their study, the researchers looked into balances of more than a hundred of Ethereum-based ICO projects. The analysis was carried out with the use of machine learning techniques. The results were based on the interpretation of smart contract data and transaction patterns on the Ethereum blockchain.
The resulting report suggests that the combined value of all the tokens reserved by the ICO teams for themselves dropped from $24 billion to $5 billion. BitMEX sees the main reason of such drastic devaluation in the general cryptocurrency market collapse in 2018.
“Based on current illiquid spot prices, the ICO teams still appear to own around US$5 billion of their own tokens, money they essentially got from nothing, depending on ones view. At the same time the teams may have realized gains of US$1.5 billion by selling tokens, based on coins leaving team address clusters,” – the report reads.
Notably, the historical combined peak value of the said tokens exceeded $80 billion.
“This analysis highlights the lack of standards and transparency in the ICO market, especially when it comes to the allocation of tokens to the founding team’s wallet. Teams were often able to mint, burn, buy, and sell (their own) tokens at will, without analysts being able to easily track what is occurring. We would often see tokens in exchange clusters, and it was hard to tell whether the token project “paid” the exchange to list tokens or the token project just transferred their treasury to the exchange to cash out,” – the experts concluded.
It is also worth noting that December 2018 saw ICO projects selling 416 000 ETH. This was preceded by another 400 000 ethers being dumped in November.