The Rise and Fall of ICO Mania in 2017-2018

The period between 2017 and 2018 witnessed an unprecedented surge in Initial Coin Offerings (ICOs), often likened to the Dutch Tulip Mania. The ICO boom reached its peak in early 2018.

The ICO Boom of 2017

2017 saw staggering numbers:

• Over $5.6 billion was raised.
• More than 800 ICOs launched.
• Filecoin raised $257 million.

The Peak and Subsequent Decline

By the end of 2018, ICOs had raised nearly $30 billion. However, investor returns often didn’t match the hype. Many ICO portfolios experienced significant losses.

Factors Influencing ICO Success

Regression analysis shows that offer price, market sentiment (CCI30), funds raised, and campaign duration influenced ICO performance.

Lessons Learned

The ICO boom highlighted the risks of speculation and the importance of evaluating projects.

The Dark Side of the Boom: Scams and Unfulfilled Promises

The rapid growth of the ICO market also attracted unscrupulous actors. Many projects lacked viable business plans, sound technology, or even genuine intentions. Investors often poured money into ventures based solely on whitepapers and promises, without adequate due diligence. This led to numerous scams, rug pulls, and projects that simply failed to deliver on their initial promises. A significant percentage of ICOs from 2017 saw their token values plummet, leaving investors with substantial losses. In fact, one analysis showed that a hypothetical ICO portfolio was down approximately 66% from its peak.

The Regulatory Crackdown

The lack of regulation in the ICO space initially fueled its growth, but it also created a breeding ground for fraud and abuse. As investors lost money and concerns about illicit activities grew, regulatory bodies around the world began to take notice. The Securities and Exchange Commission (SEC) in the United States, along with other international regulators, started cracking down on ICOs that were deemed to be unregistered securities offerings. This regulatory scrutiny further dampened investor enthusiasm and contributed to the decline of the ICO market.

The Shift to Alternative Funding Models

Following the ICO craze, the cryptocurrency industry began to explore alternative fundraising models. Initial Exchange Offerings (IEOs), where cryptocurrency exchanges vetted and launched new projects, gained popularity as a more regulated and trustworthy alternative. Security Token Offerings (STOs), which offered tokens representing ownership in real-world assets, also emerged as a potential solution for compliant fundraising. While these alternative models offered some improvements, they never quite replicated the explosive growth and excitement of the ICO era.

The Legacy of ICO Mania

The ICO boom and bust served as a valuable lesson for the cryptocurrency industry. It highlighted the importance of due diligence, regulatory compliance, and sustainable business models. While the ICO frenzy has subsided, it paved the way for the development of new blockchain technologies and applications. The experience also underscored the need for greater investor education and regulatory clarity in the rapidly evolving world of digital assets. Today, in 2025, the industry is arguably more mature and cautious, benefiting from the lessons learned during the tumultuous ICO years. The focus has shifted towards projects with real-world utility, strong teams, and a commitment to long-term sustainability, a direct consequence of the excesses and failures of the ICO mania.