Investing.com – Regulators may be cracking down on initial coin offerings because of their potential for fraud, but a new study of ICOs says they produce large returns for investors.
A Boston College study of 4,000 planned and completed ICOs over the past two years found the average return for investors was 82%.
The average return is even higher when only the 2,390 completed ICOs are counted. Investors earned 179% during the average, 16-day holding period, which is the time between the closing of the ICO and the coin’s first day of trading.
The study says the high rate of return is partly because the coins are underpriced, reflecting both the inexperience of the people behind the ICOs and the riskiness of cryptocurrencies.
Part of that risk is the survival rate of ICOs. The Boston College study found that only 44% of the ICOS studied were still active 120 days after their offering, based on official Twitter activity.
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