Why Do Businesses Go Crypto? An Empirical Analysis of Initial Coin Offerings

36 Pages Posted: 3 Oct 2017 Last revised: 20 Apr 2018

See all articles by Saman Adhami

Saman Adhami

Vienna Graduate School of Finance (VGSF)

Giancarlo Giudici

Polytechnic University of Milan - Dipartimento di Ingegneria Gestionale

Stefano Martinazzi

Polytechnic University of Milan

Date Written: January 6, 2018

Abstract

In this work, we provide the first comprehensive description of the Initial Coin Offering (ICO) phenomenon, which by the end of 2017 allowed startups around the world to raise more than $5.3 billion, according to market observers. We analyze the determinants of the success of these token offerings by considering a sample of 253 campaigns. We find that the probability of an ICO’s success is higher if the code source is available when a token presale is organized, and when tokens allow contributors to access a specific service (or to share profits). Our results provide valuable insights into this new source of capital for businesses and the key determinants of fundraising success.

Keywords: Initial Coin Offerings, Cryptocurrencies, Blockchain

JEL Classification: G32, G38

Suggested Citation

Adhami, Saman and Giudici, Giancarlo and Martinazzi, Stefano, Why Do Businesses Go Crypto? An Empirical Analysis of Initial Coin Offerings (January 6, 2018). Journal of Economics and Business, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3046209 or http://dx.doi.org/10.2139/ssrn.3046209

Saman Adhami

Vienna Graduate School of Finance (VGSF) ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Giancarlo Giudici (Contact Author)

Polytechnic University of Milan - Dipartimento di Ingegneria Gestionale ( email )

Via Lambruschini 4
Milan, 20156
Italy

Stefano Martinazzi

Polytechnic University of Milan ( email )

Piazza Leonardo da Vinci
Milan, Milano 20100
Italy

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