- We’ve selected three categories of venture funds that have invested in an ICO (to our knowledge, and not just equity) as a general proxy for venture-ICO returns, recognizing that the data is more estimation than concrete performance
- Looking at the estimated median ICO returns across six venture funds, we find VC ICO investments not only underperform direct returns on holding bitcoin and ether, but have also likely seen significant loss in holding value within token designated portfolios
- Assuming 25% discounts on book value to ICO price to recalculate median returns, only Draper Associates’ and DCG’s ICO portfolios yield positive median ICO returns in our comp set
- A number of funds are holding illiquid, pre-launched token sale instruments, which are set to launch in 2H19; these investments may skew performance numbers to finish the year
Last week, The Block’s Larry Cermak analyzed return data from close to 400 ICO projects (via ICO Drops) and found that only 30 ICOs (7.7%) have outperformed bitcoin since the time of listing, with ~11% of the observations in the sample still earning a positive return. Even worse, more than 74% of all ICOs have lost more than 90% compared to the price of BTC during that time.