Early-Warning Signals of Political Risk in Stablecoin Markets: Human and Algorithmic Behavior Around the 2024 U.S. Election

Kundan Mukhia, Buddha Nath Sharma, Salam Rabindrajit Luwang, Md. Nurujjaman, Chittaranjan Hens, Suman Saha and Tanujit Chakraborty

Papers from arXiv.org

Abstract: We study how the 2024 U.S. presidential election, viewed as a major political risk event, affected cryptocurrency markets by distinguishing human-driven peer-to-peer stablecoin transactions from automated algorithmic activity. Using structural break analysis, we find that human-driven Ethereum Request for Comment 20 (ERC-20) transactions shifted on November 3, two days before the election, while exchange trading volumes reacted only on Election Day. Automated smart-contract activity adjusted much later, with structural breaks appearing in January 2025. We validate these shifts using surrogate-based robustness tests. Complementary energy-spectrum analysis of Bitcoin and Ethereum identifies pronounced post-election turbulence, and a structural vector autoregression confirms a regime shift in stablecoin dynamics. Overall, human-driven stablecoin flows act as early-warning indicators of political stress, preceding both exchange behavior and algorithmic responses.

Date: 2025-11
New Economics Papers: this item is included in nep-pay
References: Add references at CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2512.00893 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2512.00893

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().