How much can you earn on ICO?

How much can you earn on ICO – it is one of the most frequent questions asked by begginer investors. It’s hard to find a clear answer to a question posed like this, but investors were able to see several dozen percent of profit within a few years in the best case. On the other hand, some of the ICO’s don’t progress, because developers are unable to achieve their goals, while some others turn out to be regular scams aimed at puling funds from investors. Even though there are numerous risks related to ICO, mostly caused by a lack of regulations, more and more investors decide to put their funds in new projects that are shooting up like mushrooms. The question remains: should you invest in ICO and how much can you earn?

Will 2018 become the ICO year?

Many thought that 2017 surpassed the expectations of the whole ICO world. The first quarter of 2018 has passed and we can already see that 2017 was just a warm up. ICO’s have raised more than $5.6 billion and many thought it was an insurmountable amount of money. In the meantime, just during the first 3 months of 2018 ICO’s have raised more than $4.6 billion. If the trend will be upheld, 2018 may finish with a result of over $25 billion invested in ICO’s.

Can you earn on ICO?

Investing in ICO is not the same thing as investing in already existing cryptocurrencies. When you decide to buy a cryptocurrency that’s has been on the market for some time already, you expose yourself to a much lower risk. You can check the information on how the particular cryptocurrency reacts to market changes or see how the developers are working on the project.

Significantly higher risk related to investing in ICO tokens is caused by the lack of knowledge about the particular project limited to the information in its whitepaper. The biggest problem of whitepapers is the fact that anything can be put in such document, while we have no guarantee it will be ever brought to life. It should be also noted that a part of whitepapers are written using a technical language and we get to the point, where an average investor is not fully aware what he’s investing in.

You may say that investing in ICO’s is mostly based on a belief in a selected project. As you will see in a moment, this belief may be highly profitable. We’ll be using a report created by Hugo Benedetti and Leon Kostovetsky from Boston College.

Statistical ICO

A typical ICO raises around $12 million. Still, we should remember about a few huge ICO’s like Filecoin or Telegram, which were able to get a big part of the whole pool. This is why the median for ICO’s in 2017 was close to $4 million. If we compare these numbers to the data from the beginning of 2018, we can clearly see that the numbers have been already doubled, which means a bigger interest of ICO investors.

Zwroty z inwestycji w ICO

Source: Benedetti, Kostovetsky (2018)

In our opinion, the cart above is the most interesting one in the published report. We can see the profit from the ICO token after it was indexed on exchanges (blue line), return from the token index (weighter average of all tokens) and return on Bitcoin investment. As you can see 250 day after the token was listed on exchanges, investors gain up to 800%. In case of the index the result is 450%, and Bitcoin brings 300% of profits. This clearly shows the risk related to ICO’s is worth it.