Interesting research conducted by BitMex along with TokenAnalyst claims that blockchain projects that collected funds through ICOs have sold as much Ethereum as they raised in Dollar terms.
Compelling Fact-Finding Research
Contrary to what was being believed, a study has found that ICO projects have sold as much ethereum as they raised when calculated in Dollar terms. The research has been conducted by BitMex, a cryptocurrency derivative trading platform along with TokenAnalyst, a cryptocurrency research platform, on 222 projects including EOS. In fact, the report concludes that the startups still hold ETH worth $830 Million (At the current price levels).
The report, however, does not mention the timeframe of the ICO projects included in the study.
Detailed Findings
As per the research abstract, 222 ICO projects raised 15,183,779 ETH worth $5463 Million. Out of this EOS alone accounted for 7,211,776 ETH worth $3842 Million and the remaining projects for 7,972,003 ETH worth $1,639 Million.
In due course, EOS sold 7,211,776 ETH for $3,892 Million and the remaining projects sold 4,113,345 ETH for $1,560 Million. So, a total of 11,325,121 ETH was sold for $5,452 Million. This leaves the projects with a holding of 3,858,659 ETH worth $830 Million at the current price levels.
The research has been conducted considering the funds raised only through ETH and not other cryptocurrencies. Nor does the analysis consider the native token holdings of the projects.
The Dollar amount raised is calculated using the price of ETH at the time of the ICO. Monthly average price of the cryptocurrency has been used to calculate the Dollar value of the ETH sold during a month.
Conclusions
ETH prices dropped more than 44% in September, and it was being widely believed that the projects would have suffered losses because they sold their holdings in panic due to the fear of further decline. However, this report has debunked that theory.
Despite the 85% drop in the price of Ethereum from its all-time high of $1400 in December last year, the projects have realized gains of US$727 million due to profits from Ethereum they have already sold. These findings make it clear that leaving perhaps a few, most of the projects sold a considerable part of their ETH holdings when prices were relatively higher.
The Projects currently hold 3.8 million Ethereum, which is almost 25% of the original coins raised. The ICO projects are still in positive with net unrealized gains of US$93 million based on an Ethereum price of US$215. Surprisingly some ICOs are still in a net unrealized profit situation apparently because the ICO ran much before the bull run at the end of the year.
The research by BitMex and TokenAnalyst seems to contradict the thesis that the projects which raised capital through ICOs last year were in losses due to the decline in ETH prices and that they sold their holdings in a panic. If the findings are to be believed, we should see no further downside in ETH prices, at least due to the selling of the remaining holding of these projects.
Do you agree with the findings of this report? In your opinion what was the cause of the massive decline in ETH prices in September? Let us know in the comments below.
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