Thread by @lawmaster

1/ Just when using an ICO as a fundraising method seemed to have finally died, it’s come back even stronger, more resilient and with a new acronym, IEO. IEOs are unsustainable, but for now Binance is outperforming the competition

theblockcrypto.com/2019/07/31/ieo…

2/ Approximately 180 projects raised funds through an IEO while at least 40 exchanges facilitated at least one IEO in 2019.

Four little known exchanges (ProBit, Coineal, Bitforex, and Exmarkets) that are attempting to capitalize on the trend have facilitated 45% of all the IEOs

3/ Because of the low quality of small exchanges, I analyzed all the projects that had an IEO on the more legitimate exchanges ( Binance, Bitfinex, Bittrex, OKEx, Huobi, KuCoin. These exchanges have had 28 IEOs combined, out of which 64% have had a positive return in terms of USD

4/ Perhaps a more indicative metric is a return in terms of bitcoin - only 12 projects, less than half, have outperformed bitcoin.

5/ IEOs’ largest appeal is its speculative nature. The all-time high return of 12 projects had been higher than 500%.

6/ But because most of the investors buy the tokens just to sell them for a higher price a few months later, the price is never sustained. About 75% of projects have lost 50% of value since their all-time high and 39% of projects lost more than 75% of value since ATH.

7/ Moreover, there appears to be a relationship between the price change since the all-time high and the number of days since the IEO took place. The more days it has been since the IEO, the higher the price crash since ATH has been.

8/ Binance’s IEO success is hard for other exchanges to replicate. Binance is in the best position to facilitate token sales because it of its access to the largest retail userbase and it can, therefore, be more selective with projects than other exchanges.

9/ Average IEO returns in 2019

@binance - 258%
@OKEx - 125%
@HuobiGlobal - 87%
@kucoincom - 28%
@ethfinex/@bitfinex - (11%)
@BittrexExchange - (14%)

10/ The data shows that IEO tokens can’t sustain value over the long term. The most rational strategy to maximize profits would, therefore, be to invest in IEOs facilitated by the most successful exchanges and to not hold over the long term. Long term, invest in something else