Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230357
Authors: 
Park, Cyn-Young
Tian, Shu
Zhao, Bo
Year of Publication: 
2020
Series/Report no.: 
ADB Economics Working Paper Series No. 605
Abstract: 
Since the launch of Bitcoin in 2009, the spectacular rise and fall of cryptocurrencies and the underlying blockchain technology have attracted global attention. While the application of distributed ledger technology presents great economic and business potential, significant volatility and speculative trading of cryptocurrencies have raised concerns over investor and consumer protection and prompted government interventions within their respective jurisdictions. This study focuses on the six Bitcoin trading markets comprising 99% of global trading volume as of February 2018. Adopting the event study methodology to newly compiled information about local regulation events, we find that the effect of government regulations on the Bitcoin price is only short-lived, but regulations discourage trading activities for a longer term in local markets. Interestingly, however, the repressive effect of domestic regulations on trading activities can be mitigated by the domestic financial market openness. Together, these findings are consistent with the view that Bitcoin markets are globally integrated and that, to uphold market integrity, international cooperation would be essential.
Subjects: 
Bitcoin
cryptocurrency
financial market openness
international cooperation
regulation
JEL: 
E61
G10
G14
G18
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/3.0/igo/
Document Type: 
Working Paper

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