One of the world's largest audit and consulting companies Ernst & Young (EY) has published a report on price dynamics of tokens issued within the framework of the ICO. As follows from the report, the cost of 86% of ICO tokens fell below the price of a token-sale.
EY published its first ICO market report in December 2017. At that time, auditors examined 372 projects, of which they allocated 110 particularly outstanding ICOs, collecting a little more than 87% of all funds raised. The consulting firm called this list a "Class of 2017."
Now, the researchers have returned to this list and found out that the projects from the “Class of 2017” are not doing so well. For example, only 25 have a working product or at least a prototype. Analysts also found that 30% of tokens, in general, have lost the value.
Also, according to Ernst & Young, not a single blockchain platform has been able to compete with Ethereum, although infrastructure projects have shown the best dynamics.
Recall that earlier, Diar conducted an analysis of the ICO market and the data also suggests that the rate of more than 70% of ICO tokens fell below their prices during the token-sale. During the evaluation of 562 ICO-projects that provided reliable information about the process of raising funds within the framework of the public placement of tokens, it turned out that 7 out of 10 ICO tokens are valued below their initial cost.
WHY IS IT IMPORTANT?
- The company's experts are convinced that the volume of retail investment in the industry will decline, and venture capital firms and investment funds will take their place.
- It is also reported that the initiatives aimed at creating blockchain-infrastructures were successful projects. Analysts believe that these data suggest that the cryptocurrency industry should work on the bugs and work out the fundamentals.
- Ernst & Young intend to re-audit the token portfolio another year.