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The impact of Initial Coin Offerings (ICOs) and cryptocurrencies on business financing.

Sheffield Business School

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Dr J Serbera , Dr Y Wang Applications accepted all year round Self-Funded PhD Students Only

About the Project

The revolution of Blockchain technology has led to profound changes in the way financial transactions take place at the global level.
Traditionally, companies are financed through debt or equity. Of course, these financings are denominated in traditional currencies and under the control of the central banks. The use of blockchain technology, on the other hand, has enabled the development of unconventional currencies such as digital currencies (e.g. Bitcoin, Ether, Ripple). The decentralised aspect of cryptocurrencies allows unlimited flexibility in the way companies can be financed. Indeed, the issuance of a cryptocurrency specific to a commercial company makes it possible to obtain financing without giving up control or dividend rights. In addition, regulation is much more lax compared to traditional capital raising on the stock market.

Indeed, when a company aim to become listed on the stock market, it proceeds with an initial public offering (IPO). On the other hand, when a company decides to use digital currency financing, it carries out an initial coin offering (ICO). ICOs, as they are less regulated, require fewer forms and procedural stages to complete, less advice and do not require the costly intermediary of an underwriter such as an investment bank. Therefore, the comparison between these two means of financing is the subject of this PhD because it offers an answer to contemporary problems that are of practical interest and applied to modern finance.
It would be interesting to investigate whether the same pricing effects appear during a traditional IPO or when funds are collected using digital currencies. For example, in an IPO it is common for the investment bankers responsible of issuing the shares to offer them for sale at a price below the market price, this phenomenon is called underpricing.

In addition, the study of ICOs could focus on the challenges and opportunities of using this new type of financing in terms of risk to investors and the financial system. In addition, the impact of this new financing on competition for traditional financial institutions is another interesting development of this study.

Using data collected on Blomberg and other databases (e.g Coinbase) related to digital currencies, an econometric study could show whether the underpricing effect is present with ICOs. Indeed, if the observation of cryptocurrency prices shows a significant appreciation after introduction and the statistical analysis is significant, then it is possible to conclude that an underpricing effect is present.Other issues related to corporate financing such as the cost of capital, profitability and the success rate of companies that use this type of financing could be considered. You should be able to investigate and collect financial data, including stock and cryptocurrency prices. Knowledge of econometric methods and the use of software such as SPSS is recommended. In addition to the quantitative aspect of this research, a documentary search of the literature on the subject could in itself constitute a contribution to knowledge.
To apply for a self-funded PhD, you will need to meet our entry requirements and provide:
1. fully completed Sheffield Hallam University application form
2. research proposal (4-6 sides of A4 in length).
3. transcript of marks from your highest qualification (we require a dissertation mark of 60+).
4. copy of your award certificates
5. two references, one ideally from an academic source. References must be supplied as recent letters on headed notepaper or on the reference section on the University’s application form.
6. Where English is not your first language, we require evidence of your English language ability to the following minimum level of proficiency. An IELTS score of 7.0 overall (with all component marks of 6.5 or higher), a TOEFL test with an overall score of 100 internet based (minimum component score of 23 in listening and reading, 26 in writing and 22 in speaking) or SHU TESOL English Language qualification (final overall grade of A with all components graded at B or higher) or a recognised equivalent testing system. Your test score must be within the last two years.
Information on entry requirements, tuition fees and other costs can be found here

How to apply
Please submit your application to [Email Address Removed]

Applicants wishing to be considered for:
• February 2020 entry: submit your application by 12pm November 22nd 2019
• May 2020 entry: submit your application by 12pm February 22nd 2020
• October 2020 entry: submit your application by 12pm June 22nd 2020

Funding Notes

There is no funding attached to this project. The applicant will need to fund their own tuition fees, research costs and living expenses. Information on tuition fees, research and other costs can be found at
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