Can Twitter sentiments predict success of initial coin offerings?

Bhimireddy, Nishanth, Pierrakis, Yannis and Vecchiato, Riccardo (2022) Can Twitter sentiments predict success of initial coin offerings? In: Paper development workshop (PDW) for PhD students and early career researchers; 25 Nov 2022, Held online. (Unpublished)


Entrepreneurs face significant challenge to raise capital for new ventures. For many years, entrepreneurs sought funding from variety of sources, including venture capital, angel investors, and crowdfunding. Initial coin offerings (ICOs) are an innovation developed to raise funds through crowd of investors over internet leveraging blockchain and smart contracts. ICOs raise funds in exchange for tokens. One of the innovations of ICOs is the ability to raise large amount of money in short time with low transaction costs and without the need of trusted central authorities or middlemen. These ventures raise funds in a time period varying between minutes to years having a start date and an end date. Twitter is one of the social networks used by these ventures to communicate project details to public and create an interest about venture. Further public uses twitter to post opinions on various ICO projects using hashtags. In the context of stock market previous research looked at how public use Twitter to communicate about stocks, and whether Twitter activity forecasts the stock market. We use sentiment analysis to see if opinions (positive or negative) expressed on Twitter before an ICO's end date have an impact on the amount of money raised. The implication of this study is that tweets made by public can represent public perception towards an ICO before the completion of token sale.

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