Initial Coin Offerings Hyped and Dehyped: An Empirical Examination
46 Pages Posted: 14 Nov 2018 Last revised: 23 Mar 2019
Date Written: March 15, 2019
We conduct a systematic examination of the returns to initial coin offerings (ICOs) throughout the hype cycle using hand-compiled data on all trading ICOs from 2014 to 2019. We demonstrate that ICOs persistently outperform non-ICO cryptocurrencies during both the market boom and crash. We then uncover significant return determinants in the cross section along both informational and behavioral dimensions, and document significant differences in their return association in the post-hype period from late 2018 onward. Our results position ICOs as a unique asset class with features from both reward-based crowdfunding and equities, and the crowdfunding features become more dominant post-hype.
Keywords: initial coin offering, cryotocurrency, blockchain, fintech
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