BitMEX Research report: of 12 big initial exchange offerings in 2019, 11 are almost worthless compared to the price their tokens first traded for on exchanges
Initial exchange offerings (IEOs), which launched in 2019 have lost investors up to 98% of their money, damning new statistics show.
Context & Ripple Effects
Initial exchange offerings were sold as the fix to the ICO bust, when one-third of 2017-18 ICO tokens never even made it onto an exchange. By having the exchange itself vet and host the sale, IEOs promised curation where ICOs had none.
BitMEX Research's tally shows the curation premium was illusory: 11 of 12 major 2019 IEO tokens sit near worthless against their first exchange prices, with losses up to 98%. That lands the same verdict as earlier blowups like Bitconnect's $2.6B collapse and Bancor's post-ICO slide, and it foreshadows the broader finding that ~80% of freshly minted tokens trade underwater versus bitcoin.
First-order effects
- Investors who bought these 12 tokens at their first exchange prices have lost up to 98% of their money, with only one of the cohort holding value.
- The exchanges that hosted these sales — whose vetting was the entire selling point of the IEO format — take a direct hit to the credibility of their token-launch businesses.
Second-order effects
- Exchanges lose their key differentiator over ICO-era fundraising, forcing them to compete on other grounds just as scrutiny of exchange conduct intensifies ahead of the FTX reckoning later covered by FTX's bankruptcy and $10B of user claims.
- Retail capital rotates away from new token launches toward bitcoin and established assets, since the benchmark comparison in the 2022 token study shows new issuances underperforming the base asset itself.
Third-order effects
- If every repackaged fundraising format produces the same washout, regulators gain a documented record that exchange endorsement is not investor protection — pushing token distribution toward registered, disclosure-based structures.
- The recurring failure rate across ICOs, IEOs, and fresh listings widens the gap between a small set of durable assets and a long tail of near-worthless tokens, consolidating liquidity and influence around major exchanges and bitcoin.
The trend: Crypto fundraising keeps rebranding its launch mechanism — ICO to IEO and beyond — while the underlying outcome stays constant: most newly issued tokens destroy value relative to the assets investors could already hold.