TY - JOUR T1 - Investor Sentiment and Initial Coin Offerings JF - The Journal of Alternative Investments DO - 10.3905/jai.2019.1.069 SP - jai.2019.1.069 AU - Wolfgang Drobetz AU - Paul P. Momtaz AU - Henning Schröder Y1 - 2019/03/06 UR - https://pm-research.com/content/early/2019/03/05/jai.2019.1.069.abstract N2 - 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. ER -