Digital Tulips?: returns to investors in initial coin offerings

Hugo Benedetti; Leonard Kostovetsky

doi:10.1016/j.jcorpfin.2020.101786

Digital Tulips? returns to investors in initial coin offerings

Hugo Benedetti^*, Leonard Kostovetsky^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

76 Scopus citations

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.

Original language	English
Article number	101786
Pages (from-to)	1-20
Number of pages	20
Journal	Journal of Corporate Finance
Volume	66
DOIs	https://doi.org/10.1016/j.jcorpfin.2020.101786
State	Published - Feb 2021

Bibliographical note

Publisher Copyright:
© 2020 Elsevier B.V.

Keywords

Cryptocurrencies
ICOs
Offerings
Underpricing
Venture capital

Access to Document

10.1016/j.jcorpfin.2020.101786

Cite this

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