CFE 2020: Start Registration
View Submission - CFE
A1035
Title: Cryptocurrency adoption and successful ICOs Authors:  Luis Puch - Universidad Complutense de Madrid and ICAE (Spain) [presenting]
Abstract: Widespread use of Initial Coin Offerings (ICOs) to raise funds from investors is taking place. We test theory for the evolution of inflation and cryptocurrency holdings that support a successful ICO. In so doing, we construct a data set that contains information on prices and market capitalization for the top cryptocurrencies available in the market. Then we combine this information with various details on the corresponding {\em yellow papers} provided by the issuers. In particular, we focus on various distinguishing characteristics of adoption plans, and therefore, conditional on initial tokens and initial prices, we analyze the evolution of inflation and market capitalization for utility cryptocurrencies at early stages. Our findings suggest that consistency between the number of cryptocurrency holdings that agents are willing to accept and the rate of fall in the exchange rate of the cryptocurrency with respect to legal tender are crucial to identify successful ICOs.