2018 has been a tough year for the cryptocurrency markets, and crowdsales have borne the brunt of it. ICOs launching in the first quarter of this year have struggled to turn a profit, with the majority of exchange listed tokens trading at a loss, both in USD and ETH terms. As a consequence, pre-sales provide the only means of turning a profit and even thats a long shot.

At MIT Bitcoin Expo on Saturday, Christian Catalini claimed that 40% to 50% of ICOs are currently underwater trading at a price lower than the initial offering price. Having examined the data for 2018, using Tokendata and ICO Stats, news.Bitcoin.com can confirm this to be a reasonable estimate. In fact, 76% of 74 ICOs completed this year are in the red, posting an average dollar return of 0.9x. The 56 exchange listed ICOs that are trading at a loss have an average USD return of 0.45x. (ICO Stats calculates its ROI based on the tokens pre-sale price, rather than the public sale, so the average return for all 76 ICOs is in fact slightly lower than stated.)

Ethereum has dropped in value since the start of the year, reducing the average dollar return on every ICO to have launched on its network. Even if 2018s losing ICOs are calculated in ETH terms, however, they are still trading at an average return of 0.9x. Whatever way the numbers are crunched, investing in ICOs is now an extremely risky business thats statistically unlikely to produce a short-term profit. These projects may go on to produce a healthy profit once their infrastructure develops and the markets pick up. But if investors can purchase the tokens on exchanges for cheap in the interim, it defeats the whole point of signing up for a crowdsale.

The Halcyon Days of 2017 Are Long Gone
76% of This Years ICOs Are Under WaterIn 2017, ICOs produced an average ROI of 573% according to Coinist.io. This year, just one ICO Zilliqa has surpassed that figure, delivering 12x. Last years big hitters, by way of comparison, were Spectrecoin (46,000%), Storj (7,600%), Populous (5,400%) and Qtum (4,500%). Theres still plenty of time for 2018s ICOs to come good, though right now investors would simply be happy to see their tokens turn green. Its been evident for some time that pre-sales are the only realistic route into an ICO. Deep discounting at this stage means theres typically few tokens left by the time of the public sale, and the valuation of these, coupled with market conditions, makes profiting all but impossible.

Of the 22 ICOs that are in the green this year, just two (9%) are for app tokens. Every other project is for blockchain infrastructure development of some sort, be it dApp directories, DEXes, new chains, or scaling solutions. If youre going to invest in an ICO, then, the message is clear: be selective, choose blockchain projects over X on the blockchain platforms, and make sure you get into the pre-sale. Otherwise, youll be wasting your time and your ethereum.

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