A recent study conducted by two researchers at Boston College in Massachusetts revealed something interesting about initial coin offerings (ICO). While the results should be taken with a grain of salt, they’re an indication of how loosely ICOs are conducted, and why cryptocurrency investors and enthusiasts need to refrain from putting all of their trust in the activity.

Hugo Benedetti and Leonard Kostovetsky decided to investigate the success rate of ICOs. They found that just 44.2% of all ICOs launched remained active after four months of their launch date. Given that $12 billion has been injected into 4,000 projects through investment money, that’s a substantial amount that fizzled out.

It’s important to note that the research wasn’t conducted using a wide range of data sources. The pair simply used data collected from Twitter to determine their results and ICOs that showed no activity after the fourth month were categorized as dead. Given that the social media platform is one of the most common ways to spread information about a business, it’s a fairly accurate measure, but not 100% foolproof.

The researchers’ paper further stated, “Breaking it down by category, 83% of the 694 ICOs that don’t report capital and don’t list on an exchange are inactive after 120 days. For the 420 ICOs that raise some capital but don’t list, this figure falls to 52%, and for the 440 ICOs that list on an exchange, only 16% are inactive in the fifth month.”

Benedetti and Kostovetsky also broke down the returns earned by investors through ICOs, as well as the average returns gained over varying timeframes. They said that values of tokens continued to increase for six months after the ICO, explaining, “…in contrast to IPOs [initial public offering], crypto-tokens continue to generate abnormal positive average returns after the ICO.”

“We find evidence of significant ICO underpricing, with average returns of 179% from the ICO price to the first day’s opening market price, over a holding period that averages just 16 days. Even after imputing returns of -100% to ICOs that don’t list their tokens within 60 days and adjusting for the returns of the asset class, the representative ICO investor earns 82%,” said the team.

The researchers addressed the abnormal returns more, stating, “Startups sell their tokens during the ICO at a significant discount to the opening market price, generating an average return for ICO investors of 179%, accrued over an average holding period of 16 days from the ICO end date to the listing date.”

The conclusion of the research, as provided by the researchers, is that the figures are indicative of potential bubbles surrounding ICOs, but that there is the potential for substantial returns for those willing to accept an investment risk in unregulated offerings that are “unproven pre-revenue platforms.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.