Only 38% Of Funds Raised In ICO Retain In Corporate Accounts
According to research findings provided by the analytical resource Diar, only 38% of the funds raised in ICOs retain in the accounts of crypto and blockchain projects, whereby 62% of all assets could have been cashed or wired.
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Experts justify ICOs by claiming that a large amount of withdrawn funds doesn’t necessarily mean that they were spent in vain. ICO campaigns are aimed at raising funds for the project formation and development, henceforth a certain amount of capital is being gradually spent on a product creation, marketing, etc.
It is noteworthy that ICOs of startups amount to approximately 4% of the total number of issued ETH in circulation, which is almost 1% less than in fall of the current year.
Most crypto projects aren’t able to demonstrate significant profits and continue to save ethers on their corporate accounts, said Larry Cermak, the Head Analyst at Diar. He added that the projects are likely to sell ethers only to cover costs, thus causing fluctuations in crypto prices and making matters worse on the ICO market. Specialists analyzed the current crisis situation of the crypto market and found out that many projects do not hurry to spend raised ethers.
Also researchers found out that the number of ethers exceeded the volume of their declared capitalization in some projects' accounts. In particular, the companies Singular DTV, Gnosis, and Aragon were mentioned.
As previously reported, according to data from Santiment, the projects that attracted funding through ICO hold more than 3.3 million ethers.