What do responses of financial markets to the collapse of FTX say about investor interest in cryptocurrencies? Event-study evidence

Imran Yousaf, Yasir Riaz and John W Goodell

Finance Research Letters, 2023, vol. 53, issue C

Abstract: Studying the impact of the collapse of FTX on financial markets, we identify that, while this event was important to cryptocurrency markets, it was mostly irrelevant to traditional assets. Bitcoin, ethereum, and binance responded significantly negatively, while equity, energy, and currency markets were largely unmoved. Gold and silver having significant positive returns suggests cryptocurrency investors fled to purported safe havens. Results are consistent with traditional investors already having evolved to indifference to cryptocurrencies during the bear market prior to the FTX collapse. Results also suggest that cryptocurrencies are likely not as important a concern to financial stability as previously regarded.

Keywords: FTX; Cryptocurrencies; Financial market risk; Event studies (search for similar items in EconPapers)
JEL-codes: G01 G14 G33 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000351

DOI: 10.1016/j.frl.2023.103661

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