BitMex Report: ICO Firms Made $24 Billion out of Thin Air

A recent report published by BitMex suggests that ICO firms might have raked in billions of dollars without any accountability or proof amidst the 2017 craze for ICO listings.

The BitMex report published on January 16 analyzed the ICO market during 2017-18 peak and concluded that the ICO startups made a total of $24 Billion from different projects. A total of $1.5 Billion was distributed among the team members behind these startups. The total holdings got reduced to $5 Billion as a result of bearish market trends throughout 2018.

The research study concluded by BitMex was the third paper, investing and tracking the money of token creators and ICO listing startups. The paper tracks the money made by these startups and tries to match it with the roadmap they presented to the world.

The latest research tracked down $24 Billion worth of tokens that the teams created and distributed among themselves.

The Amount Could Have Been $80 Billion

The research team behind the study said that the price analysis was adjusted with the market trends and cycles. If the tokens were considered on the parameters of 2017 high market cycles the amount could have been $80 Billion. If we consider 2017 high as the basis of the analysis, these ICO startups totalled $70 Billion in unrealized losses, which is equivalent to the GDP of Myanmar.

The researchers refer to these holdings as,

“[It is] money they essentially got from nothing, depending on one’s view. At the same time, the teams may have realized gains of US$1.5 billion by selling tokens, based on coins leaving team address clusters.”

ICO Startups Pocketed $13 Billion of Unaccountable Money

Arthur Hayes, CEO of Bitmex, has called out teams looking to raise a huge amount of capital through the modern-day crowdfunding for Tokenization, ICO. Arthur believes the whole hoopla around the prices make the new entrants focus entirely on the financial aspect rather than focusing on the project.

A part of the report support Arthur claims, as it has been noticed that a total of $13 Billion were pocketed by the ICO and token makers, without any accountability or transparency.

In order to understand the gravity, the crypto trade market is very volatile and it has far from sufficient liquidity to support billion-dollar sales of an obscure token, with no value of its own.

Breaking Down The Billion Dollar Facade

The Bitmex report details the projects which carried out billion dollar worth of token distribution, without taking any market factor into consideration, as if financial dynamics are a part of the parallel universe. The following calculation is done on the basis of the price of the token at the time of issuing.

  • Veritaseum(VERI) issued the highest amount of $4.8 Billion worth of tokens to its team members.
  • NOAH Coin issued tokens worth of $4.4 Billion to its team members.
  • KIN issued $1 Billion worth of tokens to its team members.

If we compare the price point with the January 2019 data, Veritaseum has lost over $3.2 Billion while Kin has declined by $700 million.

The biggest loser from the ICO Paradise Era includes SALT and IoT Chain, both losing 97% of the total gains made during their ICO listings.

Here is an excerpt from the research,

“The ICO cycle now appears to be dying down to some extent and it’s much harder to raise funds than it was in late 2017. But with so much money made and lost, the events of 2017 and early 2018 are not likely to be quickly forgotten.”