HomeAltcoin NewsICOs Withdraw $17 Million in ETH During November

ICOs Withdraw $17 Million in ETH During November


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As the crypto market has cratered over the last month, ICOs responded by withdrawing 170,000 Ethereum from their coffers.

To say that 2018 has been a brutal year for cryptocurrency is an understatement. The massive hype that fueled a massive bull run to all-time highs in late 2017 has morphed into cryptocurrencies losing a large percentage of their accumulated value over the course of this year. The first few weeks of November provided some welcome stability, but the last several weeks saw bearish pressure once again take a firm grip upon the market. One result of this sudden downturn is that ICOs have raided their coffers.

ICOs Breaking into Their Own Piggy Bank

November has been a harsh month. Bitcoin went from almost $6,400 down to $3,600 before ending the month at $4,277. By contrast, Ethereum began November at almost $200 before plummeting down to $104 before pushing back up to $119. During that time, ETH lost its number two position on the market capitalization chart to XRP, dropping to third place.

ICOs took note of the falling fortunes of ETH. Diar notes that 170,000 ETH were withdrawn from company coffers over the course of the month. The last week was the most frantic as developers pulled out over 100,000 Ethereum during that time.


What Does This Mean?

On one hand, this action could be viewed as the ICOs panicking over the falling price of Ethereum and trying to salvage what they could in the meantime. Watching the financial backing of your project fall by about 50 percent is enough to give any developer a panic attack.

However, Diar also notes that this massive withdrawal should be taken in context. The ICOs have only tapped about 22 percent of their accounts since the start of 2018. This means that the coffers of the various projects still have a majority of funds raised still in place.

One could understand ICOs deciding to convert some of their hoarded ETH. 2018 has not been the kindest year to them. Of those projects that held funding rounds in 2017, 86 percent have fallen below their listing price while a full 30% of all ICOs have essentially lost everything of value.

Funding for ICOs has slowed over the last 5 months.

Funding for ICOs has dropped quite a bit over the last six months. 2018 has seen a record $20 billion raised, but 75 percent of that was raised between January and June. The last few months have been more sparse, with totals of $862,000 (July), $1 billion (August), $500,000 (September), $686,000 (October), and $300,000 (November).

Increasing scrutiny from regulators, a lack of return from older projects, and a fierce bear market have all been dampening factors for the ICO market. One concern is that the fall in the value of ETH ($458 on January 1st, 2018) may make it impossible for projects to come to fruition. It’s great to have raised $50 million in ETH back in December 2017, but if that amount is now only worth roughly $13 million, then there might be some problems.

It’ll be interesting to see how the rest of the year pans out. If the market continues to be depressed, one wonders if ICOs will be forced to attempt further rounds of fundraising.

What do you think about ICOs withdrawing $17 million in Ethereum? Let us know in the comments below.

Images courtesy of Shutterstock.


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