BitMEX research, the research branch of BitMEX has carried out a new in-depth study which reveals some details of crypto space, especially ICOs. The research was carried out in collaboration with TokenAnalyst.
The recently released report shows that in 2018, many ICO teams allocated themselves a grand total of $24.2 billion worth of crypto tokens. The report also states that the process of these ICOs has not been very accountable or transparent while they banked in a lot of money. The most shocking thing this report discovers is that among these ICO firms, most were not even operating as projects, only promises of projects and still many people invested largely in them just due to the hype. One more thing that is questioned by the report is how these ICOs were able to make a profit of $13 billion USD totally out of thin air.
Additionally, the abstract of the report notes that “in reality, liquidity was too low for this value to be realized.” It adds that the actual value has now fallen by to $5 billion because of the bear market.
The report states, “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 one’s 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.”
Also. 54% Of the $24 billion issued to ICO teams by themselves was lost due to crashing prices of the currencies. The report then concludes that the ICO market faces a lack of standards and transparency. It highlights that it is a field without any rules, at least before the regulations. These type of firms could collect all the money from their customers with a good marketing campaign and not deliver something real.
Regarding the outcomes of the research, Arthur Hayes, the CEO of BitMEX criticized crypto startups for reaping the fruits of creating “poo poo” tokens through ICOs. “Gravity is a b*tch,” he said.