Based on these findings, the study concludes that the sustainability of an ICO depends on whether the company behind it is able to list its coin on a
crypto exchange. Investors who have supported a project during the coin offering enjoy greatest returns when the coin is listed. The researchers gathered
data for over 4,000 ICOs, which raised $12 billion since January, 2017, and found that the projects generated an average return of 179%, accrued over an
average holding period of 16 days from the last day of the ICO.
Less Than Half of ICOs Survive Four Months After Sale, Study FindsAccording to Kostovetsky, selling the acquired coins on the first day of trading is
the safest investment strategy, when it comes to ICOs. In any case, investors should sell their holdings within six months, he added. “What we find is
that once you go beyond three months, at most six months, they don’t outperform other cryptocurrencies,” Kostovetsky told Bloomberg. “The strongest
return is actually in the first month,” he emphasized.
Benedetti and Kostovetsky explain the spike in the prices of many tokens after their listing with the underpricing during the ICO,
as often they are sold to investors at significantly discounted prices compared to the open market rates. Despite that, the researchers also
found that the returns are declining over time as companies have started analyzing prior sales by similar platforms to better determine the expected
demand and the price of their coins.