Take A Look At How Ethereum Startups Are Profiting
When starting up a blockchain company (in this example, an Ethereum based on specifically) youâre probably going to look towards running and ICO to source funding. Gone are the days of knocking on the doors of investors to help fund your project, now, you simply just need to run an initial coin offering in order to generate the income needed to make your idea, a reality.
According to new research by BitMEX research however, it seems that many of these ICOs are doing more than earning the funds needed to get their wheels in motion, many are even pulling in a profit from their Ethereum based initial coin offerings.
According to The Next Web, based on the BitMEX Research data:
âBlockchain startups raised a total of $5,463 million worth of Ethereum (approximately 15 million ETH) in ICOs by September 2018. Interestingly, the sum almost matches the total amount of ETH these companies sold during the same period â $5,452 million (or 11.3 million ETH).â
From this, we can deduce that these ICOs in September alone, have pulled in a huge profit. Together, they aimed to raise around $5,452.00 through the sale of a combined 11.3 million ETH, however, $5,463 million was actually raised, turning 11.3 million ETH into around 15 million ETH.
Furthermore, according to BitMEX Research:
âIt would appear that ICOs sold much of their Ethereum before the price dropped 85 percent, from $1,400 last December to $230 in September 2018. As a result, ICOs have realized profits of $727 million, while still retaining $830 million worth of Ethereum (3.9 million ETH) in reserves. It would seem the ETH being held is pure profit for the ICOs.â
Overall, it seems that stunning profits have been realised here.
What does this mean?
We can deduce a few things from this. First of all, this debunks ideas of panic selling that is said to fuel ICOs. Clearly, these firms donât need to panic sell to scrape enough money together, not when they are making significant profits.
Moreover, it also proves just how simple and successful the ICO culture is. They seem to be successful for the companies that are indulging in them, large amounts of money is being raised, to the point that not only can startups actually afford to make their model a reality, they are also taking extra profit too.
The Next Web