Initial coin offerings and the cryptocurrency hype - the moderating role of exogenous and endogenous signals

Artikel

Initial coin offerings (ICOs) have recently emerged as a new financing instrument for entrepreneurial ventures, spurring economic and academic interest. Nevertheless, the impact of exogenous and endogenous signals on the performance of ICOs as well as the effects of the cryptocurrency hype and subsequent downfall of Bitcoin between 2016 and 2019 remain underexplored. We applied ordinary least squares (OLS) regressions based on a dataset containing 1597 ICOs that covers almost 2.5 years. The results show that exogenous and endogenous signals have a significant effect on the funds raised in ICOs. We also find that the Bitcoin price heavily drives the performance of ICOs. However, this hype effect is moderated, as high-quality ICOs are not pegged to these price developments. Revealing the interplay between hypes and signals in the ICO's asset class should broaden the discussion of this emerging digital phenomenon.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Electronic Markets ; ISSN: 1422-8890 ; Volume: 32 ; Year: 2021 ; Issue: 3 ; Pages: 1691-1705 ; Berlin, Heidelberg: Springer

Classification and Topics

• Classification: Ingenieurwissenschaften und Maschinenbau ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡ ; Criteria for Decision-Making under Risk and Uncertainty ; Information and Product Quality; Standardization and Compatibility ; Information and Internet Services; Computer Software ; New Firms; Startups
• Subject: Initial coin offering ; Cryptocurrencies ; Signaling theory ; Fundraising

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Thies, Ferdinand ; Wallbach, Sören ; Wessel, Michael ; Besler, Markus ; Benlian, Alexander
• Event: Veröffentlichung
• (who): Springer
• (where): Berlin, Heidelberg
• (when): 2021

Further information

• DOI: doi:10.1007/s12525-021-00460-9
• Last update: 10.03.2025, 11:44 AM CET