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Nigerians Stake N1.7bn On Bitcoin



Nigerians are staking more on Bitcoin as a study shows that about 56 per cent of crypto startups that raise money through token sales die within four months of their initial coin offerings (IOCs). Data on Coin Dance, a crypto currency statistics website, shows that the volume local bitcoins in Nigeria rose last week standing at N1.733 billion as at July 7, 2018 up from N1.534 billion which it was at June 30, 2018.

The volume as at last week is the highest since March this year when volume rose to N1.735 billion.
The value of the cryptocurrency presently is $6,403 having lost more than 57 per cent of its value in the last six months.
Meanwhile the findings of a Boston College study showed that only 44.2 per cent of startups survive after 120 days from the end of their ICOs.

The researchers, Hugo Benedetti and Leonard Kostovetsky, examined 2,390 ICOs that were completed before May, analysing the intensity of tweets from the startups’ Twitter accounts to infer signs of life.
Kostovetsky is an assistant professor at Boston College’s Carroll School of Management, and Benedetti is a finance PhD student at the school
The study showed that acquiring coins in an ICO and selling them on the first day is the safest investment strategy but many individual investors can’t participate in ICOs, so this option isn’t open to them. Still, all investors should probably sell their coins within the first six months.
“What we find is 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,” Kostovetsky said.
According to Kostovetsky, returns have been declining over time, as startups have become savvier about pricing coin offerings and more have people jumped into ICO investing. Returns of people who sold tokens on the first day they were listed on an exchange have been declining by four percentage points a month.
“They are much lower now, so I wouldn’t expect them to continue to decline at this rate,” he said. A slew of recent studies have shown just how risky ICO investing is. More than 1,000 tokens have already bitten the dust, according to the website Coinopsy.
“People often look at returns and say this is a great deal, but we teach in finance that return is a compensation for risk. These are stakes in platforms that have not yet been built, that have no participants yet. There’s a lot of risk. The majority of ICOs do fail,” Kostovetsky said.