A new “Wall Street Darling?” effects of regulation sentiment in cryptocurrency markets

Yosef Bonaparte and Gennaro Bernile

Finance Research Letters, 2023, vol. 52, issue C

Abstract: We analyze the prospect of cryptocurrency regulation affects cryptocurrency prices, volatility and trading using the Google Trend technique to construct the Crypto Regulation Sentiment Index (CRSX) reflecting investors’ attitude towards Crypto regulation. Our analysis encompasses over 75% of the crypto market's daily activity. We find CRSX has no statistically significant long-term impact on cryptocurrency prices, consistent with investors having overly positive attitudes towards crypto assets, making crypto a “Wall Street Darling”. Nonetheless, CRSX has a large impact on cryptocurrency price volatility and trading volume. The effects of CSRX on crypto markets largely depends on the coin's key blockchain characteristics.

Keywords: Consensus mechanism; Blockchain finance; Regulation sentiment; Proof of Work (POF); Proof-of-Stake (POS); Ethereum; Bitcoin (search for similar items in EconPapers)
JEL-codes: G10 G12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322005530

DOI: 10.1016/j.frl.2022.103376

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