Stock Price Relevance of Voluntary Disclosures about Blockchain Technology and Cryptocurrencies

We examine the firm value relevance of blockchain technology–related disclosures in 10-K filings, proxying for the involvement of firms in the trending technology and its applications. Using textual analysis to quantify blockchain-related disclosures, we first show that blockchain technology–related disclosures are indeed value relevant. However, when we further categorize the disclosures into cryptocurrency- and other blockchain-related disclosures, the result only holds for other blockchain-related disclosures. In addition, for cryptocurrency-disclosing firms that actually hold cryptocurrencies, these disclosures are negatively related to the firm's business value. Finally, based on latent Dirichlet allocation topic modeling, we find that only the disclosures about technology applications are positively value relevant. Our results indicate that investors value the involvement of blockchain technology applications positively only in business operations or solutions, and not in cryptocurrency-related issues