How Much Is Blockchain Related News Worth?

Abstract

In the blockchain frenzy, some companies announce to initiate or increase blockchain-related business and/or change their names to include “blockchain” or “bitcoin.” The US market reacts with an average cumulative abnormal return of 80.96% for the 2-day window encompassing the announcement day and the very next day. The effect is an average of 9.37% cumulative abnormal return for Mainland China and Hong Kong. After a year, all the US companies remained above pre-announcement levels, yet quite some companies in Mainland China and Hong Kong revert to pre-announcement levels and sometimes even lower; such reversal indicates that previous valuation increase is temporary.