Initial Coin Offerings And Determinants On Their Initial Returns
Abstract
I empirically evaluate the early Initial Coin Offerings (“ICOs”) initial
returns, demonstrate that undervalued in ICOs is substantial, indicating inefficient
markets for cryptocurrencies. In addition, I find that a brief selling period, the absence
of a carefully drafted white paper, a presale, and the development of an separate
blockchain might have a beneficial effect on the first returns of an ICO. My findings
also imply that the fluctuations in the cryptocurrency markets, according to Bitcoin and
Ethereum yields, is the primary driver of early returns. In addition, the presence or
absence of cryptocurrency rules is a significant determinant. First-day returns for ICOs
in the platform and high-tech services businesses are greater. Traditional finance sector,
such as the gold and stock market, hold a beneficial influence on the ICO early return.