Report: ICOs raised $13.7B in the first five months of 2018, up from $7B in 2017; only 30% of the 3,470 ICOs since 2013 closed successfully
NEW YORK (Reuters) - Digital currency sales jumped to $13.7 billion in the first five months of the year, nearly double the amount raised for the whole of 2017 …
Context & Ripple Effects
ICO fundraising has been compounding at an extraordinary clip: from $225M in 2016 to the $4B Autonomous Research counted for all of 2017, and now $13.7B in just five months of 2018 — nearly double last year's full-year figure. Earlier data already showed the mechanism working: Goldman Sachs found ICO funding had overtaken angel and early-stage VC rounds by mid-2017 (92 ICOs raising $1.25B by August), and Crunchbase calculated blockchain startups were pulling in roughly 3.5x more via token sales than traditional VC.
What makes this report different is the denominator: only 30% of the 3,470 ICOs launched since 2013 actually closed. That quality gap was visible from the start — Smith + Crown warned investors about the unregulated, abuse-prone structure back when 65 projects had raised $522M in mid-2017.
First-order effects
- Founders can now raise in five months what took all of 2017, shifting bargaining power decisively toward token-issuing teams and away from both VCs and the retail buyers absorbing unsold allocations.
- With 70% of ICOs failing to close, the marginal investor is funding a lottery: capital concentrates in a small set of completed raises while thousands of stalled projects sit on illiquid promises.
Second-order effects
- Traditional early-stage investors are being structurally outbid — Goldman's finding that ICOs surpassed angel and seed VC funding forces funds to either launch token vehicles or cede the fastest-growing segment of blockchain deal flow.
- The completion-rate problem feeds directly into a liquidity problem: one-third of 2017-18 tokens ended up listed on no exchange at all (despite half completing their rounds), which erodes the resale assumption underpinning new contributions.
Third-order effects
- If the pattern holds, the market self-corrects through collapse rather than regulation first — and it did: TokenData counted just $118M raised in Q1 2019 versus $6.9B a year earlier, a near-total evaporation of the retail funding channel.
- The durable residue is a legitimacy gap: a funding mechanism that moved billions while delivering completed, tradable projects to only a minority of participants invites the regulatory scrutiny that Smith + Crown flagged in 2017, pushing surviving fundraising toward compliant structures.
The trend: Crypto fundraising is cycling through speculative booms and busts in which the gap between dollars raised and projects delivered — not the headline totals — determines whether token sales survive as a legitimate capital-formation channel.