Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales

Howell, Sabrina T.; Niessner, Marina; Yermack, David

doi:10.1093/rfs/hhz131

Cited by 393 publications

(273 citation statements)

References 100 publications

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“…Various authors have investigated the properties of ICOs and cryptocurrencies, including Lyandres, Palazzo, and Rabetti (2019), who reflect on the similarities between cryptocurrencies and other securities, Bourveau, DeGoerge, Ellahie, and Macciocci (2019), who investigate information provision on ICOs, while Lee, Li, and Shi (2019) considers information aggregation. Finally, Howell, Niessner, and Yermack (2019) provide detailed analyses of ICO markets.…”

Section: Introductionmentioning

confidence: 99%

Cryptocurrencies: Stylized facts on a new investible instrument

Parlour

Rajan

2019

Financial Management

123

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We present stylized facts on the asset pricing properties of cryptocurrencies: summary statistics on cryptocurrency return properties and measures of common variation for secondary market returns on 222 digital coins. In our sample, secondary market returns of all other currencies are strongly correlated with Bitcoin returns. We also provide some investment characteristics of a sample of 64 initial coin offerings.

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Section: Introductionmentioning

confidence: 99%

Cryptocurrencies: Stylized facts on a new investible instrument

Parlour

Rajan

2019

Financial Management

123

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“…Adhami and Giudici (2019) study the effect of the governance signals of ICO-backed projects such as token rights, institutional setting and team quality. Howell et al (2018), Momtaz (2018a, b) and Benedetti and Kostovetsky (2018) instead look at post-ICO performance measures of success, such as trading volume, liquidity, first-day underpricing and long-run returns. Boreiko and Vidusso (2019) focus on the role of intermediaries behind successful token sales.…”

Section: Literature Reviewmentioning

confidence: 99%

Serial and large investors in initial coin offerings

Boreiko

Risteski

2020

Small Bus Econ

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This study is the first to provide systematic evidence regarding investor behaviour in initial coin offerings (ICOs), their investment patterns and their role in the success of campaigns. Using hand-collected data on 472 public token sales over the period of 2013-2017, we advance the ICO literature by demonstrating that some contributors often invest in more than one campaign, and such serial investors contribute earlier. However, they are not more informed and fail to pick betterquality ICOs. Only large serial investors invest more in campaigns that raise more funds, attract more contributors, are more likely to reach their hard caps, and distribute tokens that are listed on crypto exchange. Our findings raise the question of whether regulatory or industry self-regulation agreements on information provision measures are needed to protect smaller retail ICO investors that exhibit naïve reinforcement learning behaviour.

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“…and De Jong et al (2018) study the determinants of successful attempts to raise funds with an ICO. Howell et al (2018) document factors that affect the liquidity and trading volumes of tokens in secondary markets.…”

Section: Related Literaturementioning

confidence: 99%

Entrepreneurial Incentives and the Role of Initial Coin Offerings

Garratt

Oordt

2019

SSRN Journal

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Initial coin offerings (ICOs) are a new mode of financing start-ups that saw an explosion in popularity in 2017 but declined in popularity in the second half of 2018 as regulatory pressure, instances of fraud and reports of poor performance began to undermine their reputation. We examine whether ICOs are a passing fad or a worthwhile form of financing with beneficial economic properties. We do so by examining how financing a start-up through an ICO changes the incentives of an entrepreneur relative to debt and venture capital financing. Depending on market characteristics, an ICO can result in a better or worse alignment of the interests of the entrepreneur and the investors compared with conventional modes of financing. Notably, an ICO can be the only form of financing that induces optimal effort and hence maximizes the net present value of the start-up, and there are projects that should not take place at all unless they can be financed through an ICO.

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Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales

Cited by 393 publications

References 100 publications

Cryptocurrencies: Stylized facts on a new investible instrument

Cryptocurrencies: Stylized facts on a new investible instrument

Serial and large investors in initial coin offerings

Entrepreneurial Incentives and the Role of Initial Coin Offerings

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