Effects of the COVID-19 pandemic on stock price performance of blockchain-based companies

Arash Kordestani, Natallia Pashkevich, Pejvak Oghazi, Maziar Sahamkhadam and Vahid Sohrabpour

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 3206-3224

Abstract: The price of a stock rises or falls in relation to a number of different factors, including changes to the economy brought about by pandemics. A few studies have already identified the effect of the COVID-19 pandemic on the stock market. However, empirical evidence is lacking on changes in stock price performance of blockchain-based companies as a result of the COVID-19 pandemic. We use the event study approach to estimate stock expected returns by applying an asset pricing model over a thirty-day event window around the announcement on March 11, 2020 by the World Health Organization (WHO) regarding the outbreak of the coronavirus (COVID-19) as a global pandemic, using a sample of S&P Global 1200 companies. Overall, our results indicate more sensitivity in blockchain-based companies’ stock prices to the COVID-19 pandemic compared to those of non-blockchain-based companies. Cumulative abnormal returns show that the stock price of blockchain-based companies recover losses slower than non-blockchain companies. Our findings are important for investors and shareholders for future pandemics and events.

Date: 2022
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DOI: 10.1080/1331677X.2021.1986676

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