IEOs, or initial exchange offerings, are relatively new in the world of crypto exchanges. But that doesn’t mean they aren’t having an impact.
An IEO is a way for investors to get in on new tokens early, with the added peace of mind of exchanges operating as middlemen between them and individual projects (a key benefit over ICOs).
There’s plenty of money to be made in these investments. But how do you know what the best performing IEO launchpads are so you know where to look for new offerings?
Let’s look at what makes an IEO platform worth considering for investors.
Which IEO Launchpads are Worth Investors’ Attention?
There may be times when you get involved in an IEO because you’re passionate about the project behind it and you want to support it. But in most cases, as an investor what you’re really looking for is a return on that investment, or ROI.
Your best chances of that are to work through exchanges with a solid history of returns for their IEO investors. It’s not enough for an exchange to have a cycle of hits and misses. Their job is to vet projects and bring the best opportunities to their members. The ones that do so consistently are the ones to keep an eye on.
How to Tell Which Exchanges Offer the Best Returns
Sure. Your ROI is important with IEOs just like with any other investment. But how do you know what kind of return exchanges have provided investors in the past?
Fortunately, CryptoRank.io makes this data available. Below, for example, you can see the average current returns and average all-time-high returns on a variety of IEO platforms over the past year.
As you can see above, returns on IEO investments can vary wildly. But this data is just a start. After all, averages don’t tell the entire story, especially in an area as new as IEOs.
Keeping Your Eye on Changing Markets
While the average ROI of various exchanges gives you a glimpse of their history, it’s important to remember that most haven’t listed many IEOs yet.
So, for example, look at the average current and all-time-high ROIs for both BitMax and Huobi Global in the graph above.
You’ll notice BitMax is ranked higher with a current ROI of 86.80% while Huobi is at 77.78%.
On its face, BitMax looks like the safer bet, right? But it’s not a complete picture.
You should also consider the number of past IEOs those average returns are based on. In this case, the BitMax average is based on only two past sales whereas Huobi has a slightly lower average but it’s based on four.
That’s not a lot of IEO history for either exchange yet, but trust doesn’t come only from returns. It depends on the consistency of the returns an exchange offers investors.
This isn’t a recommendation to invest through any platform over another, but an example of why ROI statistics don’t always tell the whole story. One failed IEO would impact an exchange that’s only done two so far much more than it would affect the consistency of an exchange with ten for instance.
With most exchanges having fewer than five IEOs under their belts as of writing, those statistics could change significantly based on just one or two upcoming sales. It’s worth keeping an eye on volatility in that sense, but also paying closer attention to more recent and upcoming sales to see how each exchange you’re considering handles their track record in the future.
An Exchange’s History Matters
You’ll notice also in the chart above that more established crypto marketplaces seem to perform better with IEO returns. And that shouldn’t be surprising.
After all, these would be the exchanges with the largest existing investor bases, meaning there will be more competition to drive up prices as well as more active communities. But it also means these exchanges have the most to lose. It’s vital they choose only the best IEOs, because failed projects would reflect poorly on their judgment and broader reputation.
These are just some things to consider when it comes to identifying the best performing IEO launchpads. Have you taken part in an IEO from one of the exchanges included in the graph above? You can share your experiences with our readers in the comments.
Disclaimer: This article is not meant to serve as financial advice or a recommendation for any particular IEO platform or crypto exchange. For investment advice, please reach out to a licensed financial professional.