The report indicates that nearly $24.2 billion was raised by issuing ICO tokens until the end of December 2018. However, only $5 billion remains currently with the ICO teams, based on the illiquid spot prices.
Founding teams are attributing this massive depreciation in value to factors like the fall in the market value of the tokens as well as transfers away from team address clusters. Among them, the reduction in the market price of the tokens is said to account for almost 54% loss.
Team-controlled token holdings (Own tokens) – summary data: Source BitMEX Research
The peak valuation of the team holdings of their own token’s (based on the individual price peak for each coin) is more than $80 billion. This could mean nearly $70 billion in losses from this ‘peak’ value.
There are typically two ways by which the ICO Teams make profits as per BitMEX report: The first is by selling the newly issued tokens, often in exchange for Ether; the second method is by issuing themselves their own tokens.
BitMEX combined the figures from their report for both these scenarios and noted that ICO teams seem to have profited by almost $13 billion from this ICO process. The detailed breakup is as shown below.
(Source: BitMEX Research, TokenAnlayst, )
BitMEX notes that the ICO markets have turned out to be a great opportunity for founders to make profits. They simply need to drop their brand-new tokens to the market in exchange for ETH, driving up the price of their tokens, resulting in gaining access to more ETH that could be held or cashed out later.
BitMEX highlights the fact that unlike traditional markets, there are no clear restrictions, lockup clauses, and vesting schedules for ICOs in the free fundraising markets. This means that the ICO founders are able to make profits even without developing the technology or solution that was promised to the investors. The investors have thus ended up at the losing end of the deal.
Ironically, in spite of the huge decline in the value of the ICO market, the ICO teams “still appear to own around US$5 billion of their own tokens, money they essentially got from nothing”.