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ICO investors

Author

Listed:
  • Rüdiger Fahlenbrach

    (Swiss Finance Institute @ EPFL
    ECGI)

  • Marc Frattaroli

    (Swiss Finance Institute @ EPFL)

Abstract

We conduct a detailed analysis of investors in successful initial coin offerings (ICOs). The average ICO has 4700 contributors. The median participant contributes small amounts and many investors sell their tokens before the underlying product is developed. Large presale investors obtain tokens at a discount and flip part of their allocation shortly after the ICO. ICO contributors lack the protections traditionally afforded to investors in early-stage financing. Nevertheless, returns 9 months after the ICO are positive on average, driven mostly by an increase in the value of the Ethereum cryptocurrency.

Suggested Citation

  • Rüdiger Fahlenbrach & Marc Frattaroli, 2021. "ICO investors," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 35(1), pages 1-59, March.
    • Handle: RePEc:kap:fmktpm:v:35:y:2021:i:1:d:10.1007_s11408-020-00366-0
    DOI: 10.1007/s11408-020-00366-0
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    More about this item

    Keywords

    Initial coin offering; FinTech; Individual investors;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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