The Boston College study found that about 56% of startups that raised money through cryptocurrencies closed down within four months of ICO (the first token issue).
The study judges the status of the business by analyzing the Twitter accounts of these startups. After analyzing 2,390 ICO companies before May, the researchers found that only 44.2% of companies survived within 120 days of ICO.
Kostovetsky, assistant professor at the Boston School of Carroll School of Management, said in an interview that buying and selling tokens on the first day of the ICO is the safest investment strategy. However, many individual investors cannot participate in the ICO. But investors should also sell their tokens in the first six months.
Kostovetsky said: "We found that once more than three months, up to six months, they will not perform better than other cryptocurrencies. The strongest return is actually in the first month."
Kostovetsky pointed out that the rate of return has been declining over time. Because startups have become more savvy about token pricing, more people are starting to invest.
According to Wall Street, a joint report by PricewaterhouseCoopers and the Swiss Encrypted Valley Association showed that the ICO reached a record high in the first half of 2018.
Between January and May 2018, a total of 537 companies registered to issue ICO projects and raised $13.7 billion, almost twice the size of 2017. In 2017, a total of 552 ICOs were issued, raising a total of just over $7 billion.