Determinants of ICO success and post-ICO performance

Aslan A., Şensoy A., Akdeniz L.

Borsa Istanbul Review, vol.23, no.1, pp.217-239, 2023 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 23 Issue: 1
  • Publication Date: 2023
  • Doi Number: 10.1016/j.bir.2022.10.005
  • Journal Name: Borsa Istanbul Review
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, EconLit, Directory of Open Access Journals
  • Page Numbers: pp.217-239
  • Keywords: Fundraising success, Initial coin offerings, Post-ICO Performance, Underpricing
  • TED University Affiliated: Yes

Abstract

Initial coin offerings (ICOs) have emerged as an alternative way of raising funds for entrepreneurial ventures to develop a new project or product. In this study, a comprehensive analysis is conducted on the determinants of ICO success and aftermarket performance of ICOs. Our evidence suggests that ICOs with higher ratings, shorter planned token sale duration, smaller share for token sale, larger number of experts and more members in the developing team have a greater likelihood of success and raising more funds. We also show that offer price and market sentiment play a major role in explaining longer term post-ICO performance. Yet, key to a successful ICO and post-ICO performance differ between boom vs bust periods in the cryptocurrency markets.