Gone with the fire: Market reaction to cryptocurrency exchange shutdown

Arbeitspapier

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.

Object Details

• Language: Englisch

Classification and Topics

• Classification: Wirtschaft ; Asset Pricing; Trading Volume; Bond Interest Rates ; Information and Market Efficiency; Event Studies; Insider Trading ; International Financial Markets ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
• Subject: Cryptocurrency ; abnormal return ; Event study ; Network service disruption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lee, Hanol ; Wie, Dainn
• Event: Veröffentlichung
• (who): ZBW - Leibniz Information Centre for Economics
• (where): Kiel, Hamburg
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/266545
• Last update: 10.03.2025, 11:44 AM CET