A1117
Title: Cryptocurrency in war: A double-edged sword?
Authors: Jeffrey Chu - Renmin University of China (China) [presenting]
Stephen Chan - American University of Sharjah (United Arab Emirates)
Yuanyuan Zhang - University of Manchester (United Kingdom)
Abstract: The purpose is to examine the short-term impact of the Russia-Ukraine war on the high-frequency digital asset markets. An event study approach is applied, focusing on the initial months of the war, and hourly returns of cryptocurrencies, DeFi tokens, and metaverse tokens are analyzed. It is found that negative war-related events have both an immediate and sustained impact on cryptocurrencies and DeFi tokens, likely due to a series of negative events leading to positive returns. In contrast to stocks and commodities like gold, cryptocurrencies and DeFi tokens exhibit positive and significant cumulative returns following negative war-related events. This suggests that these assets could serve as diversifiers or hedges against such events, similar to the political property observed for oil. Importantly, these findings provide preliminary insights into the ongoing Russia-Ukraine conflict and help to understand the impact of military conflict on cryptocurrency markets more broadly.
