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

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  • Thies, Ferdinand
  • Wallbach, Sören
  • Wessel, Michael
  • Besler, Markus
  • Benlian, Alexander

Abstract

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.

Suggested Citation

  • Thies, Ferdinand & Wallbach, Sören & Wessel, Michael & Besler, Markus & Benlian, Alexander, 2024. "Initial coin offerings and the cryptocurrency hype - the moderating role of exogenous and endogenous signals," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 144179, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:144179
    DOI: 10.1007/s12525-021-00460-9
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/144179/
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