Bitcoin
BTC$42 006.83

-4.17%

Ethereum
ETH$2 879.59

-7.07%

Cardano
ADA$2.20

-0.66%

Tether
USDT$1.000970

0.07%

Binance Coin
BNB$348.19

-6.87%

XRP
XRP$0.924682

-5.83%

IEOs underperformed as investors record massive loses


31 Dec 2019   #Ethereum

The last two years have seen the unprecedented rise of Initial Coin Offerings (ICO), where many companies sprang up in a bid to raise capital. However, that craze did not last long as so many investors lost almost all they had.

The fundraising schemes crippled a lot of investors, and global regulators had to step in to wash off the market with stringent rules and regulations.

Now, Initial Exchange Offering (IEO), touted as a better alternative, took center stage in 2019. However, BitMEX, a popular margin trading portal, revealed in a research that the craze did not end well. Yet again, many investors lost almost all their investment as they pursued the investment and profit-making promises of these IEOs, according to BitMEX.

From the research, some investors lost as much as 98 percent of their investment. Interestingly, most of these IEOs have either folded up or are battling with regulatory issues currently.

Story So far for IEO


After the craze for ICO died out last year, many thought IEOs would become an improved alternative. The IEO allows small token issuers to raise funds for their projects by selling tokens through a specific trading platform.

The method is an advantage to both the exchanger and the token issuer because investors are confident that the transactions take place in a secure and regulated environment. But investors thought wrong. If the funds are secured, as the investors thought, they wouldn’t have recorded the massive amount of losses from IEO this year.

The majority of the IEO investors have lost almost all they’ve invested in the respective IEO that caught their attention, BitMEX reported.

Recently, BitMEX released a research report that gave some insights into the activities of some of the major IEOs this year. In the report, BitMEX noted that all the 11 IEOs they reviewed dropped value to a considerable level, despite Bitcoin’s recent bullish trend. Since May, Bitcoin has appreciated, but within that period, the 11 IEOs have dropped significantly in value.

However, BitMEX picked out Binance’s Matic IEO as the only exception that did not drop in value during this period. It experienced a bullish trend a few weeks ago, only to witness a massive drop in value within a few days. Even after the huge drop, Matic is still trading above its initial valued price. Unfortunately, the same thing cannot be said about the other IEOs BitMEX has reviewed.

The poor performance of IEO will discourage investors


According to BitMEX, Matic is still standing above the initial value of the IEO when it was first launched. It means investors have not lost their investment since the token is still doing relatively above the initial price. However, other tokens have dropped massively, with most of them down by 80%.

The poor performance of these tokens will leave investors feeling betrayed by market sentiments and market trends. It will be difficult to convince them to trade in their cash again for an IEO. Instead, they would prefer looking at another direction for a rebranded fundraising scheme.

Author: Ali Raza for Crypto-Rating.com

Related

Derivatives data favors Ethereum bulls even with this week's crash below $3K
Ethereum's spot setup looks grim, but derivatives data tells a different story
Ethereum head & shoulders chart pattern puts ETH price at risk of dropping to $2K
Ethereum options data suggests the battle for $4K ETH is at least a week away
Ethereum price metrics back traders confidence in $3,800 ETH
Ethereum layer-twos reportedly processing more transactions than Bitcoin
Top up with stablecoins at FreshForex
Ethereum's rise to No.1 crypto seems unstoppable
Cryptocurrency derivatives market shows growth despite regulatory FUD

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap Volume 24h
1 Bitcoin (BTC) BTC Bitcoin predictions 80.8% 27 $42 006.83 -4.17% -11.61% $790 777 578 253 $41 573 961 976
2 Ethereum (ETH) ETH Ethereum predictions 74.4% 50 $2 879.59 -7.07% -16.54% $338 800 687 923 $25 455 977 114
3 Cardano (ADA) ADA Cardano predictions 61.2% 78 $2.20 -0.66% -7.10% $70 530 174 233 $5 763 986 466
4 Tether (USDT) USDT Tether predictions 94% 1 $1.000970 0.07% 0.08% $68 659 237 949 $93 828 324 388
5 Binance Coin (BNB) BNB Binance Coin predictions 62.8% 78 $348.19 -6.87% -15.48% $58 542 876 453 $2 057 601 013
6 XRP (XRP) XRP XRP predictions 72% 48 $0.924682 -5.83% -13.60% $43 198 966 767 $4 659 237 045
7 Solana (SOL) SOL Solana predictions 60.8% 83 $138.11 -5.71% -4.49% $41 056 611 386 $4 034 501 259
8 USD Coin (USDC) USDC USD Coin predictions 95.6% 1 $1.000267 0.05% 0.01% $30 417 483 528 $4 065 492 865
9 Polkadot (DOT) DOT Polkadot predictions 65.2% 74 $30.18 -3.58% -11.25% $29 809 015 432 $3 812 011 883
10 Dogecoin (DOGE) DOGE Dogecoin predictions 65.6% 78 $0.207270 -6.12% -14.82% $27 239 347 325 $2 234 082 488
11 Avalanche (AVAX) AVAX Avalanche predictions 60% 84 $72.92 -1.19% 13.58% $16 064 028 875 $2 370 386 128
12 Terra (LUNA) LUNA Terra predictions 68% 61 $35.08 -2.70% 0.04% $14 034 168 133 $2 304 712 139
13 Binance USD (BUSD) BUSD Binance USD predictions 96% 1 $1.000286 0.05% 0.03% $13 472 060 941 $7 056 846 892
14 UniSwap (UNI) UNI UniSwap predictions 62.4% 74 $19.45 -7.57% -21.12% $11 897 275 823 $467 119 485
15 Chainlink (LINK) LINK Chainlink predictions 70.4% 64 $22.48 -7.13% -20.69% $10 218 284 489 $1 660 724 551

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2021 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.