Gone with the fire: Market reaction to cryptocurrency exchange shutdown

Hanol Lee and Dainn Wie

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: Disruption of exchanges frequently happens in the cryptocurrency market, though their potential impacts are relatively under-investigated. This study employs a 20-hour service interruption on October 15th, 2022, at Upbit, the dominant cryptocurrency exchange in Korea, as an exogenous shock of service interruption on the cryptocurrency market. Event study estimation shows that the change in abnormal returns depends on how important the specific exchange is to those cryptocurrencies. Cryptocurrencies predominantly traded on Upbit showed sharp reactions to both service disruption and recovery, while major currencies such as Bitcoin and Ethereum presented limited reactions to service interruption only.

Keywords: Cryptocurrency; abnormal return; Event study; Network service disruption (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 G23 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ban, nep-fmk and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:266545

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