Digital Tulips? Returns to investors in initial coin offerings

Hugo Benedetti and Leonard Kostovetsky

Journal of Corporate Finance, 2021, vol. 66, issue C

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.

Keywords: ICOs; Cryptocurrencies; Offerings; Venture capital; Underpricing (search for similar items in EconPapers)
JEL-codes: G14 G32 G38 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:66:y:2021:i:c:s0929119920302303

DOI: 10.1016/j.jcorpfin.2020.101786

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