Initial coin offerings (ICOs): Why do they succeed?

José Campino (), Ana Brochado () and Álvaro Rosa ()
Additional contact information
José Campino: Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL)
Ana Brochado: Instituto Universitário de Lisboa (ISCTE-IUL), DINÂMIA’CET
Álvaro Rosa: Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL)

Financial Innovation, 2022, vol. 8, issue 1, 1-35

Abstract: Abstract Recent literature has addressed initial coin offering (ICO) projects, which are an innovative form of venture financing through cryptocurrencies using blockchain technology. Many features of ICOs remain unexplored, leaving much room for additional research, including the success factors of ICO projects. We investigate the success of ICO projects, with our main purpose being to identify factors that influence a project’s outcome. Following a literature review, from which several potential variables were collected, we used a database comprising 428 ICO projects in the banking/financial sector to regress several econometric models. We confirmed the impacts of several variables and obtained particularly valuable results concerning project and campaign variables. We confirmed the importance of a well-structured and informative whitepaper. The proximity to certain markets with high availability of financial and human capital is also an important determinant of the success of an ICO. We also confirm the strong dependency on cryptocurrency and the impact of cryptocurrency valuations on the success of a project. Furthermore, we confirm the importance of social media in ICO projects, as well as the importance of human capital characteristics. Our research contributes to the ICO literature by capturing most of the success factors previously identified and testing their impacts based on a large database. The current research contributes to the building of systems theory and signaling theory by adapting their frameworks to the ICO environment. Our results are also important for regulators, as ICOs are mainly unregulated and have vast future potential, and for investors, who can benefit from our analysis and use it in their due diligence.

Keywords: Initial coin offering (ICO); Fintech; Bank; Financial services; Technology; Blockchain; Innovation; Venture capital; Crowdfunding; Success (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1186/s40854-021-00317-2 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:fininn:v:8:y:2022:i:1:d:10.1186_s40854-021-00317-2

Ordering information: This journal article can be ordered from
http://www.springer. ... nomics/journal/40589

DOI: 10.1186/s40854-021-00317-2

Access Statistics for this article

Financial Innovation is currently edited by J. Leon Zhao and Zongyi

More articles in Financial Innovation from Springer, Southwestern University of Finance and Economics
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().