Inform or Endorse? Twitter and the Post Initial Coin Offering Token Performance

Our research explores the link between tokens post Initial Coin Offering (ICO) market performance in terms of returns, volumes and volatility, and the role of social media activity (namely Twitter) as information disseminator vis-a-vis project endorser. We look at a sample of token negotiated for at least two year using data from HitBTC and Twitter. Results show that twitter has mainly an endorsement role: the activity in terms of likes, replies and retweets (endorsement of the project) is associated to higher returns, higher average volume traded per day and lower return’s volatility; the activity linked to original tweets and tweets with quotes, weblinks, images and videos (information dissemination) has a very much marginal effect on post ICO tokens’ market performance. The results obtained are consistent when a different trading platform (Huobi Global) is used and robust to alternative estimation technique.