Initial Coin Offerings and the Cryptocurrency Hype: The Moderating Role of Exogenous and Endogenous Signals

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

*Corresponding author for this work

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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.
Original languageEnglish
JournalElectronic Markets
Issue number3
Pages (from-to)1691-1705
Number of pages15
Publication statusPublished - Sept 2022


  • Initial coin offering
  • Cryptocurrencies
  • Signaling theory
  • Fundraising

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