PT - JOURNAL ARTICLE AU - Wolfgang Drobetz AU - Paul P. Momtaz AU - Henning Schröder TI - Investor Sentiment and Initial Coin Offerings AID - 10.3905/jai.2019.1.069 DP - 2019 Mar 06 TA - The Journal of Alternative Investments PG - jai.2019.1.069 4099 - https://pm-research.com/content/early/2019/03/05/jai.2019.1.069.short 4100 - https://pm-research.com/content/early/2019/03/05/jai.2019.1.069.full AB - We examine to what extent the market for initial coin offerings (ICOs) is driven by investor sentiment. Our results, based on a comprehensive set of sentiment and coin price data, suggest that the ICO market is driven by crypto-related sentiment, but is almost unrelated to general capital market sentiment. Among the crypto-related sentiment, social media channels, rather than traditional news channels, are the main source of investor sentiment. We find that ICO firms exploit ‘windows of opportunity’ and avoid periods of negative sentiment. Coins listed during periods with negative investor sentiment generate negative returns in the short run. Moreover, returns to investors on the first day of trading predict long-run returns up to six months.