IEOs are Overhyped? Research Shows That Most IEO Projects are not Profitable

Drishti Bhagat   Dec 19, 2019 09:00

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IEOs gained widespread popularity in 2019 and we witnessed intense competition among the leading crypto exchanges in seizing the IEO market. However, report by Blockchain Capital shows that it is not as profitable given that most people invest in an IEO for its potential to deliver high returns. According to the report, the possibility of achieving a positive YTD return depends on the platform used to manage the sale. Binance has proven to be the best option in making profits after investing in an IEO, alongside Gate.Io, OKEx, and KuCoin.


In contrast, IEOs conducted through Bitforex, Bittrex, Bibox, and Huobi Global, amongst others, do not offer any positive returns on average. The findings from the report showcased an exciting prediction regarding the IEO market for 2019 and beyond – the belief is that most investors will favor one or two exchanges, creating a new centralization issue in the process.


While it is difficult to predict the mindset of IEO investors, it is foreseeable that if Binance remains the preferred platform for this business model, IEO may not be a sustainable fundraising model in 2020. Research from ICOBench also indicated the slowdown of IEO since H2 2019, funds raised via IEO amounted to 35.5 M in Nov, a massive drop compared to 1.1 B in June. LAToken launchpad remains the leader in the number of IEOs raised (61), followed by Probit (58).


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