Are ICOs Still Worth It? Tracking the Performance of 1707 ICOs Launched in 2019-’24

• More than half of ICOs launched in the past five years now see daily trading volumes below $100,000.
• Despite 33 years of underperformance from 1968 to 2001, the majority of IPOs have shown no improvement in ROI, over the past five years, and continue to lag behind the S&P 500.

The world loves a good story about sudden wealth and nothing feeds the imagination quite like the tales of rapid fortunes made from initial coin offerings (ICOs).

In 2016 and 2017, ICOs burst onto the scene like an uninvited party guest, flipping the script on traditional funding models. Entrepreneurs dreamed big, investors scrambled for a piece of the pie and within months billions of dollars poured into ambitious projects, promising to reshape finance, technology and the very nature of ownership itself.

However, the journey was far from smooth. Some, like Polkadot (DOT), Solana (SOL) and Polygon (MATIC), performed exceptionally well, rewarding early investors. Others, like Internet Computer (ICP), acted as exit liquidity for venture capitalists (VCs) and barely got off the ground.

As polarizing as they are fascinating, ICOs still leave important questions unanswered: Are they just a playground for high-risk gamblers or do they offer genuine opportunities for long-term value? Moreover, how do they compare to the traditional “king of fundraising”—initial public offerings (IPOs)?

In this CCN Reports feature, we aim to answer these questions and find out whether either stands out as the superior investment opportunity or if both are just different paths to disappointment.

What Are ICOs and IPOs?

Before we delve deeper into ICOs and IPOs, we should first establish a foundation.

Initial coin offerings rely on blockchain-based tokens that enter circulation through a public event. Early participants obtain tokens, which may appreciate in value if market demand sustains their growth.

Often, the project team and venture capital firms retain a substantial portion of the total token supply. This strategy creates a vesting schedule where insider-held tokens unlock gradually over time. Such a schedule often aims to prevent sudden sell-offs that could jeopardize long-term price stability.

In contrast, initial public offerings involve established companies that offer shares of equity on regulated exchanges.

Regulators, like the U.S. Securities and Exchange Commission (SEC), require disclosures, including financial data, corporate governance structures and insider ownership details. This practice encourages a more predictable and transparent setting, compared to the volatile token landscape.

ICOs don’t provide formal ownership in the traditional sense. Instead, token holders gain influence based on the network’s rules.

In proof-of-stake (PoS) models, those with large token holdings have more governance power, influencing decisions and proposals. On the other hand, proof-of-work (PoW) systems give control to those who contribute the most computational power.

Like IPOs, ICOs often reward insiders and early supporters first, leaving later participants to pay higher prices and gain less influence.

Additionally, IPOs grant partial ownership of an operating business. Shareholders hold rights defined by long-established legal frameworks. They can receive dividends, vote on corporate matters and rely on protections enforced by regulators.

ICOs do not offer the same investor safeguards. While dividends in traditional equities might resemble staking rewards in ICOs and token improvement proposals (TIPs) mimic shareholder voting, these parallels lack the legal and structural strength of traditional equities.

Both systems, despite their differences, reward early movers at the expense of those who join later.

Of course, that’s not always the case. For example, Spotify opted for a direct listing rather than the standard IPO model, allowing its shares to trade freely from the start. Ethereum (ETH) pursued a public crowdsale, allocating 83.33% of tokens to the public, 8.33% to the Ethereum Foundation, and 8.3% to early contributors.

So, not every offering guarantees a huge advantage for insiders. In some cases, the offering framework distributes opportunities and risks more evenly, enabling everyone—or at least the majority, including insiders, VCs and retail investors—to win or lose together.

How Have ICOs Performed?

From 2019 to the end of November 2024, a total of 1,707 ICOs entered the market. To measure success, we categorized any token with an average daily trading volume of less than $100,000 in the past month as effectively dead.

That criterion suggests that 894 projects have faded into irrelevance, leaving 813 still in circulation.

Now comes the real question: Were ICOs worth it?

For most, the answer is no. Of the 813 surviving tokens, only 282 managed to outperform Bitcoin (BTC). The remaining tokens failed to meet what is considered the baseline for success.

We assessed the returns for ICOs by comparing each token’s performance to Bitcoin. Each token was evaluated individually from its ICO launch date until Dec. 6, 2024, then compared to Bitcoin’s returns over the same period. For instance, a token launched on Jan. 1, 2020, was evaluated from that date to Dec. 6, 2024, against Bitcoin’s performance during the same timeframe.

Bitcoin serves as a reasonable benchmark in crypto, much like the S&P 500 in equities. If a project cannot surpass Bitcoin’s returns, its merit as an investment diminishes.

So, where does this leave us?

Out of the 1,707 ICOs launched, only 16.52% emerged as successful investment opportunities.

These findings align with the research of Benedetti and Kostovetsky (2018) , who analyzed ICO survivability between 2013 and 2018. Their study revealed that 52% of ICOs became inactive after an average of 120 days, with 2017 being the peak year for ICO launches.

Our analysis of the 2019 to 2024 period produced strikingly similar results, with 52.37% of ICOs effectively classified as dead.

How Have IPOs Performed?

IPOs did not perform any better. In fact, they fared even worse. Between 2019 and November 2024, 2,030 companies went public through IPOs. Out of those, only 200 managed to outperform the S&P 500, translating to a mere 9.85% success rate.

We employed a similar methodology for measuring IPO returns as we did for ICOs. Each IPO’s performance was calculated from its listing date to Dec. 6, 2024, and then compared to the S&P 500’s returns over the same period.

This aligns with findings by Jeremy Siegel, a finance professor at the Wharton School, in his book “Stocks for the Long Run.” Siegel examines the performance of small-cap IPOs and concludes that, while IPOs often generate initial excitement and quick gains, they usually fail to deliver over the long term.

Analyzing nearly 9,000 IPOs from 1968 to 2001, Siegel found that 79% underperformed broader small-cap indices, with almost half trailing by more than 10% annually. Even in years with high-profile IPO activity, the majority of IPO portfolios consistently lagged behind.

Conclusion

The evidence suggests that both IPOs and ICOs rarely deliver superior returns. Investors may chase quick gains, but reality often disappoints.

There is a long-standing saying that IPOs don’t stand for “initial public offering” but, instead, for “it’s probably overpriced.” History has repeatedly proven this point, and our analysis has further reinforced this idea.

ICOs, on the other hand, have carved out their own legacy of unmet expectations. With only 16.52% of projects outperforming Bitcoin, the high-risk gamble has largely failed to fulfill its promise for most investors.

Much like IPOs, ICOs have proven to be anything but a guaranteed path to wealth. Given these outcomes, it seems appropriate to redefine ICOs as something along the lines of “it’s a costly opportunity.”

There are much safer strategies available that yield more dependable results without relying on luck or timing of the market.