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

Many corporate executives believe blockchain technology is broadly scalable and will achieve mainstream adoption, yet there is little evidence of significant shareholder value creation associated with corporate adoption of blockchain technology. We collect a broad sample of firms that invest in blockchain technology and examine the stock price reaction to the first public revelation of this news. Initial reactions average close to +15% and are followed by reversals over the next three months. However, we report a striking difference based on the credibility of the investment. Blockchain investments that are at an advanced stage or are confirmed in subsequent financial statements are associated with higher initial reactions and little or no reversal. The results suggest that credible corporate strategies involving blockchain technology are viewed favorably by investors.