Initial coin offerings and their initial returns

Hui Ching Hsieh, Jonas Oppermann

Research output: Contribution to journalArticlepeer-review

Abstract

We empirically examine the initial returns of Initial Coin Offerings (ICOs) and show that ICO underpricing is enormous, which implies that cryptocurrency markets are inefficient. Moreover, we find that having a short offering phase, not holding a presale, a precisely written whitepaper, and the creation of an independent blockchain all have a positive impact on ICOs’ initial returns. Our results also suggest that the driving factor behind initial returns is the movement of the cryptocurrency markets, measured by both Bitcoin and Ethereum returns. In addition, whether or not the jurisdiction has cryptocurrency regulations is an influential indicator. ICOs that belong to the high-tech services and platform industries have higher initial returns. Conventional financial assets, such as the stock market and gold, have a positive influence on ICOs’ initial returns.

Original languageEnglish
Pages (from-to)1-10
Number of pages10
JournalAsia Pacific Management Review
Volume26
Issue number1
DOIs
Publication statusPublished - 2021 Mar

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

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