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Why do businesses go crypto? An empirical analysis of initial coin offerings

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  • Adhami, Saman
  • Giudici, Giancarlo
  • Martinazzi, Stefano

Abstract

In this work, we provide the first comprehensive description of the Initial Coin Offering (ICO) phenomenon, which by the end of 2017 allowed startups around the world to raise more than $5.3 billion, according to market observers. We analyze the determinants of the success of these token offerings by considering a sample of 253 campaigns. We find that the probability of an ICO’s success is higher if the code source is available, when a token presale is organized, and when tokens allow contributors to access a specific service (or to share profits). Our results provide valuable insights into this new source of capital for businesses and into the key determinants of fundraising success.

Suggested Citation

  • Adhami, Saman & Giudici, Giancarlo & Martinazzi, Stefano, 2018. "Why do businesses go crypto? An empirical analysis of initial coin offerings," Journal of Economics and Business, Elsevier, vol. 100(C), pages 64-75.
    • Handle: RePEc:eee:jebusi:v:100:y:2018:i:c:p:64-75
    DOI: 10.1016/j.jeconbus.2018.04.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Initial coin offerings; Cryptocurrencies; Blockchain; Fintech;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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