While over 4,000 ICO projects have managed to raise a combined total of around $12 billion to date – and most since January 2017 – a majority of them fail within four months of their token sales, a new study suggests.

The research, conducted by a small team at Boston College in Massachusetts, found that a mere 44.2 percent of token projects are active into the fifth month or beyond, using their social footprint via Twitter as a barometer of health.

While the figures are perhaps shocking, they should maybe be taken with a pinch of salt, as the methodology of the study leaves some wiggle-room for ICOs to exist beyond that 120-day time-frame and not be indicated so in the data.

In determining the lifespan of an ICO, the Boston College team – Hugo Benedetti and Leonard Kostovetsky – chose to use the intensity of Twitter posts to analyze the lifecycle of projects and assumed that no tweets in the fifth month meant that the project had died.

The paper further analyzes the data, suggesting that the safest bet would be for those ICOs that manage to list on exchanges after the token launch:

The study also looked at the value of ICOs as investments and the average returns over different time-frames, after adjusting for the overall moves in the value of the cryptocurrency markets.

Benedetti and Kostovetsky found that "in contrast to IPOs, crypto-tokens continue to generate abnormal positive average returns after the ICO," with token values continuing to climb for six months after launching.

The paper states:

Once trading has got underway, tokens continue to grow in price, the paper continues, "generating average buy-and-hold abnormal returns of 48% in the first 30 trading days."

Further, the researchers say: "Startups sell their tokens during the ICO at a significant discount to the opening market price, generating an average return for ICO investors of 179%, accrued over an average holding period of 16 days from the ICO end date to the listing date."

While the figures may be hard to parse for the non-academic reader, Kostovetsky told Bloomberg that "once you go beyond three months, at most six months, they don't outperform other cryptocurrencies."

"The strongest return is actually in the first month," he added.

The paper concluded that, though the figures could indicate bubbles around token launches, they also indicate that there can be high rewards for those that accept the risk of investing in "unproven pre-revenue platforms through unregulated offerings."

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