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I Analyzed the ROIs of 1.600 Crypto ICOs – Here Is What I Learned

Ren & Heinrich· 4 min read

In this study, I want to find out which cryptos have the highest return of investment (ROI). For this, I analyzed price performance of a total of 1.648 initial coin offerings (ICOs).

The Dataset

The dataset I used is from Cryptorank. It includes data on ICO sale price, ROI at all-time high (ATH), current ROI, launchpad details and ICO start date.

What Does ROI in Crypto Mean?

The ROI is an indicator that shows how much profit you make with a certain amount of invested capital.

For example: you buy BTC for $1,000 and later sell it for $2,000 — in this case your ROI is 100%.

What Is The Highest ROI in Crypto?

Let’s look at the data now. The chart below shows the ROIs of each cryptocurrency at ATH (blue) as well as at the current time (yellow). The horizontal axis shows how much return the token/coin has made in log scale. The black line indicates a ROI of 0%, i.e. the initial ICO price. The further the dots to the right of the black line, the more return the coin has made.

We can draw the following conclusions:

  • At their ATH, the ROI of these cryptos was very high on average. A large part of the coins and tokens showed a return of several hundred to thousand percent.
  • In addition, there were also many outliers which is not shown in this chart. The highest crypto ROIs amounted to tens of thousands of percent at their peak.

A different picture emerges when we look at the current ROIs.

  • A majority of cryptocurrencies are now showing a negative return on investment. This is normal for many cryptos, which lose 90% or more of their original value over the course of their existence.
  • However, even at this point (after all, we are in the middle of a bear market) there are still some cryptos with a positive ROI.

Alright. But can we also see patterns of when and why certain ICOs are generating higher ROIs?

Yes, to a certain degree. Here is where it gets really interesting.

When Are ICOs Generating The Highest ROIs?

In the following chart, ICOs launched in different years are represented by distinct colors. You can select the year to view ICOs launched during a particular year. Generally speaking, you want to see as many cryptos as possible in the upper right quadrant — this means that ICOs generate positive returns on investment both at ATH and today.

When going through the individual years, you will notice that the performance of ICOs varies. Here is what the average ROI at ATH vs. the average ROI now looks like for the ICO launched in the specific year.

2017: 3,400% vs. 110%2018: 3,940% vs. 380%2019: 4,340% vs. 160%2020: 9,660% vs. 310%2021: 3,390% vs. -50%2022: 710% vs. -10%

Some takeaways:

  • Generally speaking, investing in ICOs from 2017 to 2021 and selling them at their respective ATHs generates returns of several thousand percent. ICOs launched in 2022 generated the weakest ROI.
  • ICOs launched in 2020 outperformed ICOs launched in other years.
  • On average, long-term holders of cryptos see significantly lower ROIs with cryptos launched in 2021 and 2022 showing the worst performance. This is because we are in a bear market now, everything has had a significant drop from ATH.

OK, what other insights does the data offer?

Which Launchpads Feature Cryptos With The Highest ROI?

Here is another chart where you can compare different years. It can filter the ROIs of cryptocurrencies according to their launchpads. I only considered launchpads which had at least 30 ICOs. Still, in some cases sample size is quite small. So take the following with a grain of salt.

As with the other chart, cryptos are the best performers in the top right quadrant. An important difference to the previous chart is that in the following chart, the total amount raised in the course of the ICOs is shown using the bubble sizes.

You will notice that the ICOs of different launchpads perform differently when comparing average ROIs at ATH vs. the current average ROIs:

Binance: 19,880% vs. 2,000%BSCPad: 6,180% vs. -20%BSC Station: 1,150% vs. -60%DAO Maker: 3,740% vs. 7%Gate.io: 1,160% vs. -52%Huobi: 2,750% vs. 150%Polkastarter: 3,720% vs. -50%Poolz: 1,500% vs. -77%PAID Network: 1,460% vs. -70%

The following things catch the eye:

  • The total amount raised has no impact on the future performance of a cryptocurrency.
  • Cryptocurrencies that used the Binance Launchpad are strongly outperforming others in terms of ROI.
  • With the exception of Binance Launchpad, only those cryptos that used Huobi and, to a lesser extent, DAO Maker as a launchpad performed well in the long term.

Summary

# Crypto # ICO # ROI

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