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Bitcoin Speculation or Value Creation? Corporate Blockchain Investments and Stock Market Reactions

July 23, 2019


We study the stock price reaction to the first public news that a firm is investing in blockchain technology. The initial reaction averages close to +15% and is followed by a reversal over the next three months. However, reactions differ substantially based on the credibility of the investment and investors’ speculative tendencies. Investments associated with lottery-type stocks and higher investor attention and sentiment exhibit higher initial reactions but are followed by significant reversals. Blockchain investments that are at an advanced stage or confirmed in subsequent financial statements, however, are associated with higher initial reactions and little or no reversal. (by Don M. Autore, Nicholas Clarke, and Danling Jiang)

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