Blockchain without Crypto? Linking On-Chain Data Growth to Firm Fundamentals and Stock Returns

Despite the explosive growth of cryptocurrencies, whether the underlying technology adds significant value and will thus sustain broad adoption remains unclear. Using proprietary data on firm-level blockchain records from 2015 to 2021, we conduct the first large-sample study linking blockchains to firm fundamentals and asset valuation in a country where cryptocurrencies are completely banned. We find that year-overyear quarterly blockchain data growth (BDG) contains value-relevant information for nowcasting and forecasting assets growth, sales growth, ROA, standardized unexpected earnings (SUE), and innovation outcomes measured through patents. BDG also predicts stock returns, especially around future earnings announcements, with a long-short BDG-sorted portfolio generating a 10.56% risk-adjusted return annually. The findings are robust across industries and regions, superior compared to other nowcasters, and hold in international samples. We further discuss the underlying economic channels (e.g., continuous disclosure and reduction in information asymmetry) and propose strategies for identifying the blockchain impact. We find results consistent with the aforementioned channels, actual use cases, and heterogeneity analyses that reveal firms with greater information asymmetry, lower disclosure quality, more industry competition, and less public trust benefit more from blockchain adoption and on-chain data growth.