Bitcoin Forum

We have seen thousands of ICO's in the past three years but they have a big failure rate.
My question here is very fundamental:
Why do so many ICOs loose in value when they are listed and what are the lessons to learn from them to gain value overtime?
Is it because they just want to loot the money? Or are there some factors that leads them to unwanted or unplanned failure?

The biggest failure of ICO projects is during bear market, as the price of cryptocurrencies are decreasing at the time, ICOs at the time are subjected to failure. Some ICOs are scam projects and nothing but scam from the onset which will result to exit scam. Some ICO will later lead to pump and dump, that is when you will see an ICO coin listed on exchanges but abruptly and significantly dropped in price to the extent people will lose at the time of listing. ICO is just like gambling, few can be profitable, but most will fail.

If price of ICO token falls down too much after listing and much lower than the ICO price. You will have to wait for months to see good rally that can be connected with their roadmap, big scheduled events. Obviously, it does make sense only if developer teams can keep up their works to meet the roadmap.

In bull market, with listing news on big exchanges, assets will mostly rise up, not fall down. Unfortunately, a few hours after x rises, price will fall down and if you are greed at in early minutes after listing, you would probably buy it at top, stuck there for a while.

Because a majority of them are scam. No MVP (Minimum Viable Product), No applicable solutions to the real world problems. Only just a bunch of ERC20 or BSC tokens created to milk off your valuable coins (Bitcoin and Ether) or money  in exchange for the valueless tokens with a lie that they grow in value X10,000 in the next 6 months. Once people realize the lie and that the token is going nowhere, the start selling off dumping the price further.

90% of them were outright scams.
90% of the ones that weren't outright scams were bad ideas or unworkable.
90% of the ones that weren't bad ideas or unworkable were never able to meet expectations.

The remaining 0.1% are still generating some interest.

You can find often projects like this, whom raising funds just to loot money out of investors. There are legit projects doing this, but still weren't able to make their project success, after some hype in the beginning project gets lost its value slowly and investors jumping ship to ship to other newer projects.

Failure usually associated with misplanned and mis organized. Projects don't tend to die easily if the management were good at handling things.

It is very simple, all ICO tokens are completely useless. So obviously when people buy these useless things they are making a bet on whether their "ticket" would win the lottery or lose. That means they have to dump it as soon as possible to get their profit out, which is why they usually get dumped right away.
This is true about all ICO tokens, there are many that are scams and the difference in scam ones is the speed at which they get dumped and sometimes the size of the initial pump they can get but the trends are identical for all of them if you ignore the size.

It's pretty simple. Besides the typical ICO scams that everyone knows exist, with investing and business in general— a lot of startups fail. And when I say a lot, I mean A LOT. And taking note that cryptocurrencies are still pretty new conceptually? Multitudes more are going to fail compared to the typical business/startup. Cryptocurrencies at it's current state is going to be hit or miss. A lot of projects are going to be created, and a lot are going to lose relevancy.

Exactly this! I read that 90%+ of startups fail, no matter the type, so that's just in their nature, to fail. That percentage is of course much higher when it comes to crypto startups as huge majority of those don't really have any reason to use cryptocurrencies, but buzzwords like "decentralized and  "blockchain" are what attracts investors and speculators.


There are two main reason why their price goes down a lot: first is because their utility token doesn't really have any use case at the time of the listing (and usually not even after few years lol), and if there is no use case, people will just dump it. 2nd and equally important is bad tokenomics, where they sell way too much in early sale phases without locking/vesting so those early investors who paid a fraction of the announced "ICO price"  simply dump the tokens upon exchange listing.

Yea, just had to mention it. Don't get me wrong, the ICO industry do deserve some crap to a certain extent(for obvious reasons), but it's not like the ICO industry isn't the only industry with high levels of failure rates. The tech industry in general has a high failure rate; it's just that we only get to see the successful ones.

Because they're thousands and they make similar promises. Why would one want an ICO besides getting richer? Most of them, if not all, exist to make the early investors richer. They're clearly ponzi schemes and you can see it yourself. They “fail” when they lose value. What kind of fundamental asset fails when it crashes on a price chart? Was it its purpose from the beginning to just have a higher price?

Even early investors usually lose a big money.
They may offer more than 50% discount to early investors. But since the tokens/coins are usually generated out of the thin air and the team behind the token/coin has a significant share of them, the price drops significantly just after listing on exchanges and all investors (including early investors) suffer a big loss.

All answer in this picture 😃

https://i.postimg.cc/rFfgJZLc/blockchain-ico-whitepaper-reality.jpg

Source: https://steemit.com/crypto/@hilarski/ico-whitepaper-and-the-reality

This is the main reason of failing most of the ICO after listed in exchange. That also mean they just want to steal people’s money by ico. And later just release a project to show their investor that they are working. :)

If by early investors you mean those that are joining during seed/private sale, in huge amount of cases they make nice profit as they are buying with much bigger discount than those during public sale. They are the ones that are making shit load of money, while public sale is when it's getting way more risky to invest. Bare in mind, we are in the bull market, and once we go back into bear, situation will get much worse and it will become much riskier even for those that are investing in the priyate sale.



Hah yeah, classic image that perfectly sums up ICOs :D

There are a lot of things to consider, but one thing that I see on more ico, there are whales who bought a big amount of the coins these are just not one, these people just one to get profit, they are not there to hold, once a target price they will dump so hard that the coin will not almost recover for those who make it, they are better projects and support from the community, one thing also is the project has no clear path in the future, means they are not prepared, they just go with the flow no plans, these I think are some of the reasons.

Rikafip briefly mentioned it, but it's important to know whether the project you are creating and the problem you are trying to solve needs a blockchain at all. The idea might be good, the team might be experienced, but is it good to run it over the blockchain, and must it have its own token? Can't the same objective be reached with an existing coin and through other systems outside of blockchain tech?

I have seen things like AR glasses, blockchain theatres, planetariums, and stuff like that trying somehow to generate funds for their startups. I see no reasons why that should be on the blockchain. Because investors don't do either, they fail.

With few exceptions ICOs are launched with only one aim i.e. to grab investors money. See data of ICOs launched in last 5 years, they are either scam or are abandoned by their team soon after the ICO is over. These are few of many factors because of which people are not taking much attention in ICOs now a days.

the idea offered certainly be very good, but the reality is different
participating in ICO is indeed a very big risk because the project could be abandoned and they run away. but if successful, you will definitely get more double profit

Some ICO indeed just want to grab some money and the obvious sign of the is the inactivity of the team or underperform after the money raised and usually the factor that make the coin lost its value after ICO almost instanly is because the team behind the project
overselling the token at ICO phase leaving no demand anymore while after ICO some people definitely gonna sell their coins.
Also, the fact that the team keep failing to fulfill the promise they proposed at the early stage of ICO is enough to make people doubt about the coin and therefore dumping it. So try to analyze an ICO first before even joining.

This is actually the sad truth. These scammers find a way how to collect money in easy way. Even ICO projects with published team members also ended up scam. As it is hard to run after them especially if you are just a small time investor, you will just accept that you have been screwed. Most of them are being dumped once listed because people holding their coins don't believe their capability to develop the project into something valuable. Only few projects can rise after the dump. Those are very few projects with real use cases. Because if they have solid foundation to begin with, they can easily recover from the dumpers.

I would answer it in a slightly different way.

What makes a blockchain project successful?

Any new token which has a real use case can become established if they can showcase their product works. However, there are 3 (or more) kinds of new tokens:

- Marketing Gimmick & Cash Grab
- Forketing
- Original Ideas

Marketing Gimmick & Cash Grab

There isn't much substance behind this kind of tokens worth discussing. It is inevitable that these will fail, taking down community capital. Some will profit, most will lose. Completely unsustainable.

Forketing

Trust me, I am not saying that all forks are bad. But if the only reason behind forking a project is purely monetary and just the introduction of a new token, I would run as fast as I can. For me, a noteworthy fork is when developers are in disagreement and one party thinks that they can create better solution than the other. And when they can't reach consensus, they part ways, and fork is created. This is a natural evolution of all open source projects. Or sometimes, a fork is created translating one technology to another to create something that did not exist. This too is equally good in my personal view.

But just forking a project for monetary gain may or may not work. This is dependent on the bandwidth of the community, how far they would like to take a project. If they lose interest, the project does not succeed.

Original Ideas

Well, the cryptocurrency industry is extremely welcoming if you think about it. Who could say that a novel idea like Chainlink would become such a massive success? But look now, they are one of the champions of the decentralized finance.

Again, the chances of a project succeeding does not purely depend on how great technologists a project has. It simply doesn't matter. There needs to be a combination of community support, competence to deliver the promises, and that's a huge team work. Not a single project has succeeded without community. But community does not necessarily mean only the people who are inside a project. It also means how open, inclusive, and permissionless a project is in the longer run for new people to join.

To summarize, successful projects are hard to determine. That's the whole beauty of this industry, that it's unpredictable.

ICO is a form of raising capital in 2017 and the projects are mainly start-up projects, without products. In 2019, there was an IEO, the success of this type of fundraising is the guarantee of trading listing and project appraisal of the exchanges. ICO on coinlist is not a new form but they are mostly projects with real products, no longer a startup project like ICO.

Good altcoin projects (they are so rare that it actually sounds like an oxymoron) are unlikely to be ruined by getting listed on some of the  smaller exchange with low volume, but more often than not that's the only thing altcoins have, being listed on some of the top exchanges so it became mandatory to splash the money for Binance listing and ignore the actual development.

The chances of success when investing in ICOs is so small because so many projects fail in the ICO market right from the start or within a few months. There are so many reasons why projects fail, but some reasons are a lot more common. Some of the reasons why ICO projects fails include...
1. Poor project concept
2. Poor planning
3. Incompetent project team
4. Poor promotion and advertisement or the project
5. Not Listing on good exchange/ Delayed listings
These are some of the more common problems that i have realized that new projects do encounter which leads to failure

Most ICOs are copies of previous launched altcoins, so there is no reason for them to exist at first place and consequently there won't be any demand for these crypto currencies. That is why they have no real value. The only factor that keeps ICO industry alive is speculation, which boosts some altcoins for a while, although they inevitably die some time later, because again, they are copies of another crypto projects and there isn't real demand for them.
ICOs are a high risk investment and by putting your funds on it you are actually gambling with your money since it's all about speculation. For the average investor the best to do is to stick with the main crypto currencies and he will be fine.

so far everything I have bought on skyward finance has gone up

Actually, reasons are always different. It can be just a bad mood of crypto market or a weak marketing campaign, it is difficult to predict if this project will be succesful or not. But you can try do research to get know if this project carry any utility and idea, if there are any good partners and big investors. And what is also imporant don’t spend money that you can’t afford to lose and always diversify.

There are so many scam ICOs today, so the majority of failed ICOs initially didn’t want you to earn. Developers just did a runner with collected money.
In case we don’t speak about scams, it is also possible that people are just not interested in this token now. For example, when there was a hype around meme coins, nobody wanted to buy something really valuable. Everybody wanted this useless coin.

- Bad mood indicators and a bit too small of a marketing environment mess up only a small corner of the value, this factor hardly puts any pressure on a strong ICO project and speaks to the value of strong projects, the origin of the family is the rearmost and most powerful layout for decisiveness. The child of the big systems cannot be a worthless person in the market, it tarnishes the reputation of the family members, whether they like it or not, the family will still add money so that the project at least has a small standing