In July 2014, the Ethereum Foundation launched one of the most important crowdfunding events in crypto history: the Ethereum pre-sale, or ICO (Initial Coin Offering). For 42 days, anyone in the world could send bitcoins to an Ethereum-controlled address and receive ether (ETH) tokens in return at a rate of roughly 2,000 ETH per 1 BTC. The goal was to raise enough money to fund Ethereum’s development through launch.
The ICO format was revolutionary. Traditional startups raise money from venture capitalists who have strict legal requirements and take large equity stakes. Ethereum had no such constraints. Anyone, anywhere in the world, could become a funder of the project. The only thing they needed was Bitcoin and an internet connection. In exchange, they received pre-launch ETH tokens that would become valuable (or worthless) depending on whether the project succeeded.
The Ethereum pre-sale raised approximately 31,000 BTC — worth about $18 million at the time. It was the largest crypto crowdfunding ever, and enormous by 2014 tech startup standards. The funds would be used to pay developers, legal costs, and infrastructure. By crypto standards, it was an enormous war chest for a team that included some of the brightest minds in blockchain technology.
The ICO also set a template that would be imitated — and often abused — for years to come. Hundreds of other projects would copy Ethereum’s approach, launching their own ICOs to raise money from retail investors. Most would be scams, vaporware, or well-meaning failures. But a handful would succeed and become major projects. The ICO era that began with Ethereum would reach its peak in 2017, with billions of dollars flowing into dubious projects, before crashing spectacularly.
For people who bought ether during the pre-sale, the returns were staggering. At the sale price of roughly $0.30 per ETH, a $1,000 purchase bought about 3,333 tokens. At Ethereum’s all-time high of around $4,800 in 2021, those tokens would be worth about $16 million. Few investments in history have produced such extraordinary returns. The Ethereum ICO is now remembered as possibly the greatest fundraising success story in the history of crypto.
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