Cryptocurrency hacking and trader behavior in bitcoin futures

Yu-Lun Chen and J. Jimmy Yang

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: We investigate the effect of cryptocurrency hacking on trader positions in CME bitcoin futures. Our results indicate that the occurrence of hacking and fraudulent incidents lead to more net-short positions and fewer participation ratio for leveraged funds in bitcoin futures. Additionally, U.S. dollar index, futures basis, and price efficiency also play significant roles in the trading of leveraged funds. Lastly, we find that the number of hacking incidents negatively affects dealers’ net-long positions. This study provides new insights into trader behaviors in bitcoin futures and offers practical implications for bitcoin investors and regulators.

Keywords: Bitcoin futures; Hacking incidents; Traders in financial futures (TFF); Hedge funds (search for similar items in EconPapers)
JEL-codes: G10 G14 G20 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s154461232401211x

DOI: 10.1016/j.frl.2024.106182

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