Messari Daily Brief Jan. 27, 2021 - Zoom Out and ICOs Crushed the S&P

The crypto community gets a lot of flak from “professional” investors in general, but nothing draws so much ire as crypto's 2017 ICO mania.

In hindsight, that "froth" wasn't too crazy. The market corrected significantly in 2018 and 2019, but today, buy and hold ICO investors have absolutely destroyed the S&P.

The best estimates we have are that ~$20 billion was raised in 2017-2018 across hundreds of ICOs. The assets in the top 25 cryptos raised ~$4.6 billion, and now represent $55 billion in market cap. If you exclude the EOS dumpster fire, those numbers are ~$550 million for $52.5 billion. That’s not a straight 100x return ("cash in" didn’t acquire entire token supplies), but it’s 25-30x at least for the top assets, and ~2.5x if you threw darts at literally every single bubbly ICO.DOT: $15.0bn ($145mm cash in)

ADA: $9.9bn ($62mm cash in)
LINK: $8.6bn ($32mm cash in)
BNB: $6.0bn ($15mm cash in)
UNI: $4.0bn (small private raise, no ICO)
AAVE: $3.4bn ($18mm cash in)
EOS: $2.4bn (raised $4.1bn, only major ICO underwater)
SNX: $2.2bn ($30mm cash in)
XTZ: $2.1bn ($228mm cash in)
ATOM: $1.7bn ($17mm cash in)

Pretty staggering in dollar terms and S&P terms, but keep in mind that BTC and ETH still outperformed the ICO market by a country mile over that time frame. Exact relative returns are hard to calculate (I’m lazy this morning and initial investment dates aren’t always black and white), but it was hard to beat the king and queen of crypto.

There’s a lesson in here for this bull market, and the coming boom in DeFi governance tokens, Web3 apps, and social currencies: it’s hard to beat the indices, but maybe sensible to be aggressive in seed deals with good teams if you aren’t simply throwing darts indiscriminately.

Headlines that matter:

• INTEL: 1inch, Maker, Uniswap collateral updates; Nucypher, Cardano, Handshake software releases; Keep multisig; Skale on Coinbase; Flow on Kraken; Tendermint security advisory (+ 20 alerts)
• dydx raises $10mm Series B (The Block)
• Google searches for bitcoin are surging in Argentina (Decrypt)
• USV: 30% of new $250mm fund will invest in crypto (CoinDesk)
• The NFT liquidity problem (CoinFund)
• FinCEN extends comment period for new crypto rules (CoinDesk)
• Ethereum Foundation postpones DevCon from August to Q4 or 2022
• Pantera joins the passive bitcoin fund game (The Block)
• Daily Shade: “We want to see the loss porn.” (WSB)