59 Pages Posted: 15 Jul 2019 Last revised: 1 Aug 2019
Date Written: July 15, 2019
We conduct a detailed analysis of investors in successful initial coin offerings (ICOs). The average ICO has 4,700 contributors. The median participant contributes small amounts and many investors sell their tokens before the underlying product is developed. Large presale investors obtain tokens at a discount and flip part of their allocation shortly after the ICO. ICO contributors lack the protections traditionally afforded to investors in early stage financing. Nevertheless, returns nine months after the ICO are positive on average, driven mostly by an increase in the value of the Ethereum cryptocurrency.
Keywords: Initial Coin Offering, FinTech, Individual Investors
JEL Classification: G11, G14, G24, H31
Suggested Citation: Suggested Citation