Study: Cryptocurrency Startups Live Fast, Die Young

By:
Chris Gaetano
Published Date:
Jul 11, 2018
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A recent economic study found that the majority of cryptocurrency startups don't make it past 120 days but, at the same time, they can still generate enormous profits for their founders, according to Fortune. The study, conducted by Boston College economists, looked at over 4,000 startups that raised $12 billion between them from Jan. 2017 to April 2018. What they found was that only 44 percent of these startups were still active 120 days after their initial coin offering (ICO). Given this rate, it would seem that many of these founders lost their shirt, but this was not necessarily so. In fact, the study found that over an average holding period of just 16 days, investors earned returns of 179 percent. So, basically, they've found that people can launch a cryptocurrency startup that will likely not last more than four months and still come away with a massive return on investment. The researchers believe that people have not yet figured out how to properly price pre-ICO sales, explaining the wild profits. However before you go launch your own cryptocurrency, the paper also notes that profit margins have been getting smaller for ICOs, indicating that the market is starting to get a better handle on these novel investments. 

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