IEO Hype, is it worth it?
Initial Exchange Offering (IEO) is, basically, a rebranding of ICO. There are a couple of differences though.
The main is, tokens are being issued by an exchange, hence it has an immediate listing possibility. Additionally, projects should go through a due diligence process by an exchange. Therefore security and liquidity should be better, resulting in increased quality of projects.`
IEOs are quite hyped right now, but what about numbers? We conducted research and analyzed data on all recent offerings. However, the dataset is still rather small, so take the following numbers with some degree of skepticism.
We analyzed 47 IEOs from 11 platforms, 15 of them are traded.
Following prices have been recorded: IEO price, 1 hour after listing close price, Current price (14 April 2019, 5:00 PM PST). Coincodex.com was used as a primary source of data.
As you can see, Binance listed the highest number of IEOs (3), while maintaining a very stable average ROI. Yelding 284% on 11th of April, and 407% one 1 hour after the listing.
ZBG, Huobi, and OKEx launched 1 IEO each, and each of them gained awesome traction, yielding 617%, 494%, and 297% respectively. However, the sample size is extremely small.
It is hard to call tokens listed on Exmarkets, Coineal, Bittrex, and Probit successful, since none of them managed to sustain positive ROI, while VeriBlock listed on Bittrex yielded 32% ROI in the 1st hour but went down all the way to -31% by April 14.
In regards to tokens that are not traded yet, Probit announced 11 IOEs and Coinlean announced 8 of them. However, Probit managed to list only WeGen, which actually is being traded on Bitforex. Coinlean listed Levolution and Percival.
It is worth saying that only mentioned platforms had such big discrepancies between announced and actually listed tokens.
Top 3 performers (Global Trading Systems, BitTorrent and TOP Network) had not only successful listing, but they also managed to improve ROI generated for investors. All other projects’ ROI decreased gradually after their listing has happened.
You can see returns for each project in the table below.
IEO is a new ICO?
The sample size is still very small to come to a really solid decision conclusion. Nevertheless, the first figures are very similar to ICO craze of previous years.
If you invested in all listed IEOs, your mean return would be around 150%, however taking into consideration the 21 IEOs that are not listed yet, it is hard to make that assumption, due to uncertainty.
If you compare growth drivers of ICOs, the listing on a notable exchange could cause FOMO and make prices skyrocket, but during IEO this is priced in basically from the beginning, hence it limits possibilities to grow.
In a broader picture, things are very similar to an ICO craze of previous years. Investors just want to believe in something, like it was with Grin, when it was launching. People just throw money without a full understanding of the fundamentals. I would say, it is a decent opportunity to make some quick buck, but the model has tons of bottlenecks in the long run.
You can expect more studies of IEO market in near future, prepared by Squilla Capital.
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