Journal ArticleDOI
Digital Tulips? Returns to Investors in Initial Coin Offerings
Reads0
Chats0
TLDR
This article analyzed a dataset of 2390 completed ICOs, which raised a total of $12 billion in capital, nearly all since January 2017, and found evidence of significant ICO underpricing, with average returns of 179% from the ICO price to the first day's opening market price, over a holding period that averages just 16 days.Abstract:
We analyze a dataset of 2390 completed ICOs, which raised a total of $12 billion in capital, nearly all since January 2017. We find evidence of significant ICO underpricing, with average returns of 179% from the ICO price to the first day's opening market price, over a holding period that averages just 16 days. After trading begins, tokens continue to appreciate in price, generating average buy-and-hold abnormal returns of 48% in the first 30 trading days. We also study the determinants of ICO underpricing and relate cryptocurrency prices to Twitter activity.read more
Citations
More filters
Journal ArticleDOI
Fintech and banking: What do we know?
TL;DR: In this article, a review of the literature on fintech and its interaction with banking is presented, including innovations in payment systems, credit markets, and insurance, with Blockchain-assisted smart contracts playing a role.
Journal ArticleDOI
Initial coin offerings (ICOs) to finance new ventures
Christian Fisch,Christian Fisch +1 more
TL;DR: In this paper, the authors explored the role of signaling ventures' technological capabilities in ICOs and found that technical white papers and high-quality source codes increase the amount raised, while patents are not associated with increased amounts of funding.
Journal ArticleDOI
Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales
TL;DR: The authors examined which issuer and ICO characteristics predict successful real outcomes (increasing issuer employment and avoiding enterprise failure). Success is associated with disclosure, credible commitment to the project, and quality signals.
Journal ArticleDOI
Initial Coin Offerings and the Value of Crypto Tokens
TL;DR: In this paper, the authors explore how entrepreneurs can use initial coin offerings to fund venture start-up costs and find that venture returns are independent of any committed growth in the supply of tokens over time, but that initial funds raised are maximized by setting that growth to zero to encourage saving by early participants.
ReportDOI
A Model of Cryptocurrencies
TL;DR: In this paper, the authors model a cryptocurrency as membership in a decentralized digital platform developed to facilitate transactions between users of certain goods or services, and show that the rigidity induced by the cryptocurrency price having to clear membership demand with supply of token by speculators, especially with strong complementarity in membership demand, can lead to market breakdown.
References
More filters
Journal ArticleDOI
The Long‐Run Performance of initial Public Offerings
TL;DR: In this article, the authors used a sample of 1,526 IPOs that went public in the U.S. in the 1975-84 period, and found that in the 3 years after going public these firms significantly underperformed a set of comparable firms matched by size and industry.
Journal ArticleDOI
Why new issues are underpriced
TL;DR: In this paper, the authors present a model for the underpricing of initial public offerings based on the existence of a group of investors whose information is superior to that of the firm as well as that of all other investors.
Journal ArticleDOI
Investment banking, reputation, and the underpricing of initial public offerings*
Randolph P. Beatty,Jay R. Ritter +1 more
TL;DR: In this paper, the authors demonstrate that there is a monotone relation between the expected underpricing of an initial public offering and the uncertainty of investors regarding its value, and they also argue that the resulting under-pricing equilibrium is enforced by investment bankers, who have reputation capital at stake.
Journal ArticleDOI
How investment bankers determine the offer price and allocation of new issues
TL;DR: In this article, the authors investigate how investment bankers use indications of interest from their client investors to price and allocate new issues and find that tension between an underwriter's propensity to presell an issue and an issuing firm's desire to obtain maximum proceeds affects the type of underwriting contract chosen.
Related Papers (5)
Are Blockchain Crowdsales the New 'Gold Rush'? Success Determinants of Initial Coin Offerings
Ryan Amsden,Denis Schweizer +1 more