The Impact Of Emotional Tone Of The White Paper On ICO Returns

Cryptocurrency token Initial Public Offering(ICO)is a new kind of fund-raising behavior based on blockchain technology.During the ICO process,project management proactively issued a token white paper to potential investors on the underlying technology and vision of the token project.The only source of information for investors is the White Paper,which arguably affects investors’ perception of blockchain projects and their trading behavior.This paper mainly studies whether the text characteristics of the token’s White Paper will significantly affect the price of token on the first trading day of the ICO,especially if the white paper in a more positive tone will lead to a higher rate of return for token.We collected data from the four major digital exchanges as a source of data.Empirically,we find that there is a positive correlation between the net positive tone of the token’s white paper and the ICO’s first-day rate of return,which shows that the tone of token’s information disclosure has a significant impact on investor behavior.In addition,this paper finds that this forward relationship is reinforced by another text feature in the token’s white paper,causal reasoning.That is,if the forward tone of the white paper enhances the return on token,the relationship will be strengthened as the logical nature of the white paper increases.The results of this paper suggest that we should strengthen the supervision of the digital securities trading market and strengthen the quality of information disclosure in the capital market.