According to Trustnodes, ICO projects have sold more than 200,000 ETH holdings in the last month. In the past week, the sell-off reached 119,000 ETH which represents approximately 0.12 % of the circulating supply.
Poor performance for ETH
As cryptocurrency market have been struck by recession, Ether's capitalisation reduced by half in the last month, from $20 billion to $10 billion.
Daily trading volume, on the other hand increased incrementally during the sell-off period.
it started with an average of $1.1 billion to oscillate between $2 and $3 billion in the last two weeks.
Volume suddenly surged when the price of Ether lowered from $200+ to $170 per unit. As ICO projects raise their funds in volatile cryptocurrencies but still have to pay their operating expenses in fiat. The $200 mark must have been price target to avoid a cash draught.
Majority of ICOs locked up their accounts
Although blockchain technology can facilitate new financial systems based on transparency, only a handful of ICO projects publish their fundraising performance and asset holdings.
Aragon, for instance, has released quarterly financial reports and often shares their investment positions on other crypto-assets.
The platform, dedicated to create and sustain decentralised organisations, reported to manage a portfolio $30 million, up $5 million from their 2017 token sale. The founding team, however, denies any "dumping" of ETH on secondary markets.
The Aragon project has always been supporting Ethereum and its community. Our token sale was done in ETH, and we haven't dumped any ETH (besides minor hedges to other cryptos, <5%) or lost faith in it.
Aragon Association board
As ICO projects raise in crypto but spend in fiat, token trading and liquidity have become an essential part of the day-to-day operations of a blockchain startup.
Not all ICO projects disclose their financial investments and public address that hold the funds. ICOs releasing 200,000 ETH is therefore an estimation and can be higher than the amount reported.
The increasing involvement of the US financial watchdog will certainly bring proper financial reporting standards to the ICO industry.