Investor emotions and fundraising performance of initial coin offerings: a lexicon based sentiment analysis of public tweets

Initial coin offerings (ICOs) have emerged as a transformative financing mechanism for entrepreneurial ventures. This study examines how public sentiment expressed on Twitter is associated with ICO fundraising outcomes. Using 399,821 tweets related to 316 ICOs conducted between October 2018 and December 2019 and applying a lexicon-based sentiment analysis, we find a strong positive association between overall public sentiment and the amount of funds raised. Among individual emotions, anticipation, surprise, joy, and trust are positively related to fundraising outcomes, while negative emotions such as anger, fear, sadness, and disgust do not show consistent effects. Additional tests reveal a nonlinear relationship in which moderate levels of positive emotions are associated with higher fundraising, whereas very high emotional intensity corresponds with smaller gains.