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IEO’s: Has the New Craze been a success?

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ICOs came and went with a resounding ‘Pop’, then came STO – which were really out of reach for the average investors, but now there are IEOs – Initial Exchange Offerings. These are essentially ICOs, but they have the backing of exchanges with tokens that suspected to be a lot less scammy.

The question is, have they taken off like the early days of ICOs and netted enormous returns for investors, or have they led to losses seen towards the back end of 2018 when these ICO projects were starting to be found out.

According to data from Longhash, it’s complicated, but predominantly, it has been more bust than boom. The research goes as such:

“Specifically, we looked at the USD prices of tokens that ended their IEOs in the first half of 2019, and that were being currently and actively traded as of Sept 2, 2019, not including tokens with an IEO cost of less than US$0.000001. We found a total of 77 such projects on Coincodex. Two-thirds of them have dropped in value from the already-low prices IEO investors paid, with median ROI percentage of -81.4 percent,” says Longhash.

So, overall, not a high return, and, as they state, it is probably a lot worse than that too. This calculation only took into account coins that were still being traded, and thus the projects that had gone to zero already were precluded.

Longhash also looked at the positive cases and tried to determine if it was about picking the wheat from the chaff to reach significant gains, but it appeared not. They state that, among the one-third of positive projects, the median positive ROI was just 64 percent.

Putting that into perspective. If investors had spent the same money merely buying Bitcoin over the same period, they would have seen returns of 300+ percent.

Looking a little deeper into the IEO craze through, there does seem to be a distinct pattern as to where the better projects are – with one massive positive outlier being Binance. The major cryptocurrency exchange saw a median ROI of 203% across its four projects. Gate.io, Huobi, and OKEx also had positive median ROI percentages.

Unfortunately, it seems as if the IEO trend shares too many similarities with its ICO cousin. There are undoubtedly a number of gems sitting among the pile, but that pile consists mostly of worthless builders rubble.

Darryn Pollock

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