Cryptocurrency project Tezos raised over $200 million in July by selling digital tokens so it could build out a secure network for smart contracts. A month earlier, Bancor reeled in $154 million on the promise of creating a transparent way to value digital coins.
They're two of the biggest so-called initial coin offerings (ICOs) to date, and both hit huge stumbling blocks right out of the gate. Tezos was struck by internal financial shenanigans and an embarrassing public spat. Bancor was beset by trading glitches — its coin is worth less today than it was at the time of launch.
And just like that, one of the hottest summer trends in tech has faded before year-end.
While investors pile into bitcoin, which surged past $10,000 for the first time this week, and continue to bet on the newer currency ethereum, they've lost their appetite for niche tokens that hit the market through a rush of ICOs.
According to TokenData, an industry analytics firm, November will wind up as the slowest month for ICOs since August, with 34 offerings as of Wednesday. More importantly, just 23 percent of the deals reached their maximum goal, the fifth straight month in which fewer than one-third of ICOs hit their target.
That's a stark contrast to the April-to-June period, when between 41 and 57 percent of deals met their mark. October was the biggest month for ICOs at 90, but also the month with the weakest success rate at 17 percent, according to TokenData.