The ICO death spiral may not be all it is spun up to be. The sneaking suspicion, as reported here and elsewhere, that projects that undertook initial coin offerings are selling reserves as ETH falls in value, may be wide of the mark if analysis from Diar Newsletter is right.
1/ There is a big misconception that ICO companies have liquidated most of their ETH holdings. In today’s issue of Diar, we looked at all the publicly available ICO treasuries and analyzed the numbers. https://t.co/EryLsW9Ouj pic.twitter.com/j2DYajcwzQ
— Larry Cermak (@lawmaster) September 10, 2018
Diar’s findings show that many popular tokens have healthy ETH balances.
Note: Smartphone users rotate device to landscape to view full table
Table 1: Popular Tokens Sitting on upward of $½ Billion (source: Diar)
| Name | ETH Raised | ETH | USD |
|---|---|---|---|
| DigixDAO | 466,648 | 395,433 | 75,808,415 |
| Golem | 820,000 | 369,023 | 70,745,428 |
| Polkadot* | 485,331 | 306,276 | 58,716,224 |
| Status | 299,898 | 246,419 | 47,241,053 |
| Aragon | 274,990 | 237,466 | 45,524,526 |
| Filecoin | 566,715 | 216,906 | 41,583,115 |
| Tezos | 361,122 | 203,468 | 39,006,848 |
| Gnosis | 250,000 | 190,367 | 36,495,316 |
| Iconomi* | 114,939 | 114,939 | 22,034,956 |
| Kyber | 200,000 | 81,999 | 15,720,048 |
| Request | 100,000 | 80,000 | 15,336,800 |
| Airswap | 119,511 | 38,908 | 7,458,999 |
| district0x | 43,000 | 37,990 | 7,283,092 |
| TenX | 245,832 | 37,835 | 7,253,353 |
| Bloom | 54,000 | 33,185 | 6,361,973 |
| Bancor | 396,720 | 30,698 | 5,885,125 |
| 0x | 80,000 | 30,050 | 5,760,831 |
| Santiment | 45,000 | 30,006 | 5,752,401 |
| Basic Att’n Tokn | 156,250 | 26,344 | 5,050,408 |
| Raiden Network | 109,532 | 24,957 | 4,784,432 |
| Sirin Labs | 205,000 | 4,290 | 822,354 |
The figures show that many top-tier projects that held their token sales before the price run-up took off at the end of last year have deep reserves of funds. That should guarantee funding of development roadmaps.
Market capitalisations less than Treasury
| Token | ETH Treasury | USD | Market Cap |
|---|---|---|---|
| Aragon | 237,466 | 45,524,526 | 21,548,571 |
| SingularDTV | 201,131 | 38,558,754 | 10,734,428 |
| Gnosis | 190,367 | 36,495,316 | 32,538,049 |
| FirstBlood | 76,921 | 14,746,463 | 5,370,291 |
| Monetha | 57,190 | 10,963,813 | 3,682,337 |
| HEROcoin | 39,116 | 7,498,962 | 1,101,650 |
| Bloom | 33,185 | 6,361,973 | 3,962,182 |
| Mysterium | 27,522 | 5,276,271 | 2,361,780 |
| Atonomi | 26,922 | 5,161,222 | 3,640,872 |
| Indorse | 16,559 | 3,174,552 | 1,531,934 |
In the foreword to the report the authors explain:
“Companies that did an ICO before the price boom of 4Q17 are sitting on massive reserves that could potentially fuel development teams for years to come. Last week TenX, a basic wallet that promises a Visa debit card, voluntary disclosed their financial positions revealing that the company is sitting on over $100Mn. Not only is that more than the company originally raised, but it’s more than their whole network is currently valued on secondary markets. And they’re not the only ones.”
ETH is down 3% today at $192 as it continues to shed value. Bitcoin has stabilised at $6,300 for now and overall market cap of crypto has slumped to $193 billion. The overwhelming majority of ICO tokens are ERC-20 compliant or some other variant, meaning they run on the rails provided by Ethereum.
There are plenty of other issues weighing on the ETH price other than projects selling out. The delay to Casper upgrade looms large and the ongoing problem of Gas prices, forcing sales of ETH to pay for the transaction costs of running dapps.
The ICO death spiral may not be across the board but as the second chart shows.
But there is still selling pressure being brought to bear by market conditions, which leaves open the question of how a continuing bear market might yet push many projects into selling substantial amounts of their ETH stash.
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