TY - JOUR
T1 - Digital Tulips?
T2 - returns to investors in initial coin offerings
AU - Benedetti, Hugo
AU - Kostovetsky, Leonard
N1 - Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2021/2
Y1 - 2021/2
N2 - 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.
AB - 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.
KW - Cryptocurrencies
KW - ICOs
KW - Offerings
KW - Underpricing
KW - Venture capital
UR - http://www.scopus.com/inward/record.url?scp=85098181407&partnerID=8YFLogxK
U2 - 10.1016/j.jcorpfin.2020.101786
DO - 10.1016/j.jcorpfin.2020.101786
M3 - Article
AN - SCOPUS:85098181407
SN - 0929-1199
VL - 66
SP - 1
EP - 20
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
M1 - 101786
ER -