Do Cryptocurrencies Have Fundamental Values?
71 Pages Posted: 11 May 2020
Date Written: April 15, 2020
This paper studies the role of technological fundamentals in Initial Coin Offering (ICO) successes and valuations. Using various machine learning methods, we construct four technology indexes for all cryptocurrencies from their ICO whitepapers. We find that the cryptocurrencies with high technology indexes are more likely to succeed and less likely to be delisted subsequently. Moreover, the technology indexes strongly and positively predict the long-run performances of the ICOs. Overall, the results suggest that technological fundamentals are an important determinant of cryptocurrency valuations.
Keywords: Initial Coin Offerings, Whitepaper, Machine Learning, Textual Analysis, FinTech, Blockchain.
JEL Classification: G12, G14, G23
Suggested Citation: Suggested Citation