As per the reports by the Big Four auditor Ernst and Young, the price of ICO tokens has collapsed down below their initial listing price.
Initial Coin Offering (ICO) is the centre of debate these days. The companies who carry out ICOs don’t necessarily live up to the promises they make to investors. In the initial months of the year 2018, 86% of the ICOs were worth less than the listing price.
In order to perform the study, Ernst and Young collected data globally on the firm that carries out ICOs and then scrutinized the topmost 141 projects which raised 87% of ICO proceeds. The execution then followed between the months January and September. 71% of projects have no such offering in the market. The reports separated the 110 projects as “Class of 2017”. The new report compares current data with ‘class of 2017’.
The global innovation leader at Ernst and Young, Paul Brody, stated that they never imagined this worst. The prices of BTC were at an all-time high in 2017 when it hit $20000 in December from $700 in January. This sudden rise led to attracting more investors and investing their money in the crypto project.
The interests of people in the crypto market insisted government to put rules and regulations and to take actions in order to prevent the illegal activities.
Initial Coin Offerings that issue tokens were assumed to be used as a mode of payment on the under construction website. The reports stated that most of the companies didn’t even build their websites. However, the companies that had built the websites started taking payments in fiats. This led to a decrease in the value of tokens.
The report shows that projects which are successful failed to make any big impact as compared to Ethereum. ETH, with most development support, is a success when it comes to projects. The report added that the quality of ICO companies is worse than ever.