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Regulation spillovers across cryptocurrency markets

Author

Listed:
  • Borri, Nicola
  • Shakhnov, Kirill

Abstract

Several countries have already introduced restrictions on trading of cryptocurrencies, and many more are evaluating whether to follow suit. We document an unprecedented drop in trading volume on the Chinese cryptocurrency market after a recent regulatory change by the Chinese authorities that severely restricted bitcoin trading. This paper shows how changes in domestic regulation not only have large effects on the domestic cryptocurrency market but also produce large international spillovers. Specifically, we observe a large increase in trading volume and relative bitcoin prices in exchange for Korean won, Japanese yen, and U.S. dollars, and on Chinese peer-to-peer exchanges.

Suggested Citation

  • Borri, Nicola & Shakhnov, Kirill, 2020. "Regulation spillovers across cryptocurrency markets," Finance Research Letters, Elsevier, vol. 36(C).
    • Handle: RePEc:eee:finlet:v:36:y:2020:i:c:s1544612319307470
    DOI: 10.1016/j.frl.2019.101333
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bitcoin; Trading volume; Regulation; China;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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