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ICO Investors

Author

Listed:
  • Rüdiger Fahlenbrach

    (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute)

  • Marc Frattaroli

    (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute)

Abstract

We conduct a detailed analysis of investors in successful initial coin offerings (ICOs). The average ICO has 4,700 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 nine 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, 2019. "ICO Investors," Swiss Finance Institute Research Paper Series 19-37, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1937
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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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