The mediating effects of the decision to purchase initial coin offering (ICO) in Thailand

ICO Market Report 2019/2020 – Performance Analysis of 2019's Initial Coin Offerings

Success of Initial Coin Offering. The Empirical Evidence from 2016-2019

This paper explores the use of initial coin offerings (ICOs) as a means of fundraising for companies through the issuance of blockchain‐based tokens. Specifically, we investigate how a company can implement ICOs and issue tokens supported by its products while taking into account the presence of network effects. We examine several aspects of ICOs, including the impacts of network effect on the company's optimal token sales design, such as the optimal token issuance price, the ICO cap (which refers to the number of tokens to be issued), and the amount of funds raised. We also consider the cases of deterministic and uncertain network effects, the impacts of limited speculators purchasing tokens during the ICO period, the comparison between ICOs and traditional bank financing, and the impact of ICO cost. The research unfolds in five key parts. Firstly, leveraging a baseline model, we derive equilibrium outcomes and the optimal token sales design, discerning the impact of deterministic and uncertain network effects. Notably, network effect uncertainty consistently benefits companies, ensuring profit resilience despite potential challenges, although in the face of such uncertainty, the ICO company may decrease the raised fund. Secondly, we investigate the consequences of a limited number of speculators in the ICO landscape, finding that adjustments on the token sales design are not required under low expected network effect. Thirdly, a comparative study between ICOs and bank financing reveals distinctive advantages of ICOs. ICOs prove capable of decreasing profit volatility while maintaining an equivalent profit compared to traditional bank financing. This insight offers valuable guidance for companies seeking optimal financing methods aligned with their risk preferences. Lastly, the impact of ICO cost on outcomes and token sales design is scrutinized. Contrary to expectations, ICO cost does not uniformly lead to an increase in the ICO cap, underscoring the nuanced relationship between costs and fundraising strategies.

An Initial Coin Offering (ICO) is a funding mechanism used by projects to sell their crypto-token in exchange for Bitcoin, Ether, etc. It is the counterpart of the Initial Public Offering in the new digital currency economy. ICOs help projects to be funded in a short time with a high-profit margin.The primary purpose of this study is isolating the principal factors that affect the decision to invest in an ICO. A large array of potential signals, consisting of promotion and marketing effects, investor motivation, founder team effects, whitepaper and ICO specific factors, are considered in an online survey and the responses are analyzed using Exploratory Factor Analysis.The results of the analysis reveal five composite principal factors that determine the decision to invest in an ICO. These five principal factors are the ICO whitepaper, websites for finance news and ICO listings, ICO project sector and founder, ICO project team and social media. Our findings provide a perspective to both investor and ICO founders about which factors to prioritize when deciding to launch an ICO or to invest in one.

PurposeThe purpose of this paper is to analyze underpricing in initial coin offerings (ICO). It bridges the gap between findings in initial public offering (IPO) literature and empirical results from ICOs.Design/methodology/approachThe sample set consists of 279 ICOs between April 2013 and January 2018. A regression analysis is performed with data from the ICOs.FindingsThe results show an average level of underpricing of ICOs of 123 percent in the USA and 97 percent in the other countries. The results for the US ICOs are significantly higher than for US IPOs on average and also higher than US IPOs at the beginning of the dot.com bubble. The authors also study the determinants of ICO underpricing. The authors use proxies based on asymmetric information from the IPO literature as well as ICO-related variables. First-day trading volume and a good sentiment on the ICO market go together with more ICO underpricing. Moreover, hot markets make first-day investors to benefit less. Finally, companies that use a large issue size or a pre-ICO (a sale of cryptocurrencies before the ICO) leave less money on the table.Research limitations/implicationsA first restriction is that the authors focus on ICOs and not on crowdfunding, though there are similarities in that both of them are novel ways to finance projects. A second restriction is that the authors had to decide on the definition of a listing day. Cryptocurrencies are traded on many exchanges, and if the exchange is tailored to the cryptocurrency itself, the data on, e.g., close prices are not necessarily to be trusted. The authors, therefore, decided to use close price data from coinmarketcap.com, which requires a listing on two exchanges. This choice implies that there may have been trades before the listing day itself. A third restriction arises from the relative newness of the ICO phenomenon. The authors gathered data on underpricing from coinmarketcap.com and combined that with project information from icobench.com. However, the data were not simply matched and they required manual adjustments based on several other sources. The authors hope that in due time data on ICOs will be as adequate as data on IPOs and that they become more readily available. It might help if regulators or the crypto community would institute publication requirements. Adherence to such requirements would also reduce the extent of fraud and of asymmetric information, so that solid issuers with good projects might benefit from less underpricing.Practical implicationsThe research may help in reducing underpricing, as the authors find that issuers can reduce it by holding a pre-ICO and by considering larger issue sizes. If they do so, investors will get fewer opportunities to benefit from underpricing. Investors can, nevertheless, also profit from the knowledge generated in this paper. When market sentiment is positive and first-day trading volume is expected to be high, investing in ICOs is likely to give them higher first-day returns. Finally, the authors hope that this paper will serve as a basis for further research into the exciting and dynamic world of cryptocurrencies.Originality/valueThere is hardly any research on underpricing of ICOs. The paper is interesting for its table with a brief comparison of ICOs and IPOs. It also searches for variables from the asymmetric information theory behind IPOs to be applied in explaining ICOs. It shows high levels of ICO underpricing in comparison to IPOs. It also gives suggestions for issuers of (and investors in) ICOs.

Recent literature has addressed initial coin offering (ICO) projects, which are an innovative form of venture financing through cryptocurrencies using blockchain technology. Many features of ICOs remain unexplored, leaving much room for additional research, including the success factors of ICO projects. We investigate the success of ICO projects, with our main purpose being to identify factors that influence a project’s outcome. Following a literature review, from which several potential variables were collected, we used a database comprising 428 ICO projects in the banking/financial sector to regress several econometric models. We confirmed the impacts of several variables and obtained particularly valuable results concerning project and campaign variables. We confirmed the importance of a well-structured and informative whitepaper. The proximity to certain markets with high availability of financial and human capital is also an important determinant of the success of an ICO. We also confirm the strong dependency on cryptocurrency and the impact of cryptocurrency valuations on the success of a project. Furthermore, we confirm the importance of social media in ICO projects, as well as the importance of human capital characteristics. Our research contributes to the ICO literature by capturing most of the success factors previously identified and testing their impacts based on a large database. The current research contributes to the building of systems theory and signaling theory by adapting their frameworks to the ICO environment. Our results are also important for regulators, as ICOs are mainly unregulated and have vast future potential, and for investors, who can benefit from our analysis and use it in their due diligence.

The Incentives of Crypto Experts in Initial Coin Offerings

Trust is All You Need: An Empirical Exploration of Initial Coin Offerings (ICOs) and ICO Reputation Scores

Institutions, regulations and initial coin offerings: An international perspective

Knowing Your Customer: Empirical Implications for Raising Capital through Initial Coin Offerings (ICOs)

This paper examines the potential and inherent difficulties of initial coin offerings (ICOs), a different approach to startup funding. It investigates investor attitudes, startup motives, and the legal environment around initial coin offerings (ICOs) using a mixed-methods methodology that includes survey responses and literature research. The findings indicate that initial coin offerings (ICOs) provide quick, decentralized funding options and a broader global reach, particularly for firms focused on technology. Nonetheless, worries about investor safety, fraud, and a lack of regulation continue. The study comes to the conclusion that although initial coin offerings (ICOs) have the potential to be revolutionary, their full potential can only be achieved with organized governance, transparency, and investor education. Initial Coin Offerings (ICOs) have become a cutting-edge way for entrepreneurs to raise money, especially in the technology and blockchain industries. This paper looks at ICOs' dual nature, emphasizing both the hazards related to investor protection and regulatory ambiguity as well as its promise as a decentralized fundraising strategy. This study highlights the main opportunities and difficulties faced by investors and entrepreneurs using a mixed-methods approach that includes surveys and a review of the literature. The results show that although initial coin offerings (ICOs) provide quick and worldwide access to cash, trust and openness are still essential to their long-term survival.

Practical Applications In Investigating the Investment Behaviors in Cryptocurrency from the Fall 2020 issue of The Journal of Alternative Investments, authors Dingli Xi, Timothy Ian O’Brie, and Elnaz Irannezhad (all of the University of Queensland in St. Lucia, Australia) investigate who is likely to invest in cryptocurrency initial coin offerings (ICOs). ICOs constitute an innovative way to raise capital for business startups and other projects—but are also very high-risk propositions for investors. Most ICOs are scams, with only 4% successfully raising money for projects. This massive fraud and the regulatory crackdowns in response to it have made ICO fundraising much more difficult. Those who wish to raise funds via ICOs therefore need better knowledge of their target investor market. The authors surveyed ICO investors to assess who invests in ICOs and what factors encourage or discourage ICO investing. They found ICO investors tend to be male, affluent, better educated, and working in banking or IT—while women, business owners, educators, and stock market investors are less likely to invest in ICOs. Financial professionals can use these and the authors’ other findings to help advise businesses and organizations about how to market their ICOs. TOPICS:Currency, emerging, in markets

This article examines the regulation of initial coin offerings (ICOs) from the Japanese perspective. An ICO may be provisionally defined as a method of raising capital in exchange for digital “coins” or “tokens” that entitle holders to certain rights. Investors who receive the digital tokens are normally provided with an opportunity for reinvestment by selling them on an exchange. Japanese state actors have been acutely aware of the risks associated with ICOs. However, it took some time before regulatory reforms were adopted aiming at enhancing protection of ICO investors on resale markets. As a result of a recent initiative by the Japanese Financial Services Agency, the first regulation of ICOs was implemented as an amendment to the Japanese Financial Instruments and Exchange Act on 31 May 2019. This article discusses critically these recent legal developments in the realm of cryptocurrency exchange and ICO markets in Japan, as well as an earlier attempt to regulate cryptocurrencies in a 2016 amendment to the Japanese Payment Services Act. The article concludes that it is important to closely monitor how ICOs develop and to keep the issue on the regulatory agenda, in order to be prepared for alternative regulatory arrangements. Japan, Initial Coin Offerings (ICOs), Cryptocurrencies/Crypto Assets, Regulatory Background, Investor Protection, Financial Services Agency, Payment Services Act, Financial Instruments and Exchange Act, Regulation on Cryptocurrencies, New Regulation on ICOs

ICOs (Initial Coin Offering) have recently become the favorite fund raising method for entrepreneurs and startups. Research indicates that a successful ICO could provide a helpful precedence for those who are in need of raising funds in the near future. In addition, the results could help the regulatory authorities identify the elements and factors which should be taken into consideration if ICOs were subject to regulation. The purpose of this study is to discover the factors which may affect the success of an ICO from 533 ICO samples which successfully raised over 5 million US dollars during the past two-year period. In general, we found that the following elements of ICOs have significant positive correlation to the final amount of fund raised, including, a higher amount of total token supply, acceptance of fiat as consideration in exchange for tokens, using the USA as an issue country, a higher percentage of token allocation to subscribers, a higher percentage of token allocation to advisors, a higher percentage of token allocation to ecosystem development, and introducing a post-ICO bonus scheme. On the contrary, we found that the following have a negative correlation to the final amount of the fund raised in an ICO: making use of bonus schemes in the ICO process, and applying longer lock-up periods in an ICO. We hope the research result will provide a new perspective for fund raisers and the government authorities.

Initial Coin Offering' or 'ICO' is a way employed by start-ups or projects for raising funds from various investors through creating and selling tokens. Initial coin offering (ICO) consists of a mechanism for funding very innovative ventures using blockchain based fundraising platforms. Due to the increasing application of blockchain in general and fundraising through ICO in particular, the area is seeking considerable attention from the scholars around the world. This present study shall highlight the existing status of development along with the contribution of researchers in this emerging area of study. The current study thoroughly reviews studies on Initial Coin Offerings. The study would highlight the current trends and latest development in the literature on the topic with the help of bibliometric analysis. Initial Coin offering or ICO is adding tremendous value to all stakeholders of business including entrepreneurs, promoters and investors with worldwide accessibility and ease of convenience for funding new ventures and also as a modern investment avenue. Keywords Initial Coin Offering, ICOs, Blockchain, Crowdfunding, Bitcoin