Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs
This study investigates the impact of terrorist attacks on the price fluctuations of Bitcoin prices and NFT sales. Although the value proposition of cryptocurrencies, Decentralized Finance, and the whole blockchain revolution is a quicker, cheaper, and more transparent kind of finance, various terro...
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| Format: | Article |
| Language: | English |
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Istanbul University Press
2023-01-01
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| Series: | İktisat Politikası Araştırmaları Dergisi |
| Subjects: | |
| Online Access: | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4C30F604F3E1488D9F7DEA33934309AA |
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| _version_ | 1850035148378079232 |
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| author | Firuze Simay Sezgin Caner Özdurak |
| author_facet | Firuze Simay Sezgin Caner Özdurak |
| author_sort | Firuze Simay Sezgin |
| collection | DOAJ |
| description | This study investigates the impact of terrorist attacks on the price fluctuations of Bitcoin prices and NFT sales. Although the value proposition of cryptocurrencies, Decentralized Finance, and the whole blockchain revolution is a quicker, cheaper, and more transparent kind of finance, various terrorist organizations tend to use cryptocurrency anonymously to finance their terrorist activities around the world by bypassing the banking system of the regulated countries. The analyses reveal that returns of Bitcoin and NFT markets are positively associated with the organization and funding phases of the terrorist attacks but negatively associated with the post-terrorist attack circumstances, meaning that it generates positive abnormal returns (AR) prior to the attack but creates negative AR right after the attack. Furthermore, while the Bitcoin news impact curve (NIC) is nearly symmetric, the NFT NIC is asymmetric, with positive shocks having significantly more impact on future volatility than negative shocks of the same magnitude. Since previous studies claim that terrorist attack news is good news for Bitcoin returns, we will enrich our AR analysis results with NICs results. |
| format | Article |
| id | doaj-art-5cbd34ce56564e89833f1fd35b3e0ea7 |
| institution | DOAJ |
| issn | 2148-3876 |
| language | English |
| publishDate | 2023-01-01 |
| publisher | Istanbul University Press |
| record_format | Article |
| series | İktisat Politikası Araştırmaları Dergisi |
| spelling | doaj-art-5cbd34ce56564e89833f1fd35b3e0ea72025-08-20T02:57:35ZengIstanbul University Pressİktisat Politikası Araştırmaları Dergisi2148-38762023-01-0110111313210.26650/JEPR1127482123456Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTsFiruze Simay Sezgin0https://orcid.org/0000-0003-0793-7480Caner Özdurak1https://orcid.org/0000-0002-4319-8315Koç Üniversitesi, Istanbul, TurkiyeYeditepe Üniversitesi, Istanbul, TurkiyeThis study investigates the impact of terrorist attacks on the price fluctuations of Bitcoin prices and NFT sales. Although the value proposition of cryptocurrencies, Decentralized Finance, and the whole blockchain revolution is a quicker, cheaper, and more transparent kind of finance, various terrorist organizations tend to use cryptocurrency anonymously to finance their terrorist activities around the world by bypassing the banking system of the regulated countries. The analyses reveal that returns of Bitcoin and NFT markets are positively associated with the organization and funding phases of the terrorist attacks but negatively associated with the post-terrorist attack circumstances, meaning that it generates positive abnormal returns (AR) prior to the attack but creates negative AR right after the attack. Furthermore, while the Bitcoin news impact curve (NIC) is nearly symmetric, the NFT NIC is asymmetric, with positive shocks having significantly more impact on future volatility than negative shocks of the same magnitude. Since previous studies claim that terrorist attack news is good news for Bitcoin returns, we will enrich our AR analysis results with NICs results.https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4C30F604F3E1488D9F7DEA33934309AAcryptocurrenciesterror attacksreturnsvolatilityevent studynews impact curves |
| spellingShingle | Firuze Simay Sezgin Caner Özdurak Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs İktisat Politikası Araştırmaları Dergisi cryptocurrencies terror attacks returns volatility event study news impact curves |
| title | Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs |
| title_full | Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs |
| title_fullStr | Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs |
| title_full_unstemmed | Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs |
| title_short | Are Crypto Assets Connected to Real World Shocks? The Nexus Between Terrorist Attacks, Bitcoin and NFTs |
| title_sort | are crypto assets connected to real world shocks the nexus between terrorist attacks bitcoin and nfts |
| topic | cryptocurrencies terror attacks returns volatility event study news impact curves |
| url | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4C30F604F3E1488D9F7DEA33934309AA |
| work_keys_str_mv | AT firuzesimaysezgin arecryptoassetsconnectedtorealworldshocksthenexusbetweenterroristattacksbitcoinandnfts AT canerozdurak arecryptoassetsconnectedtorealworldshocksthenexusbetweenterroristattacksbitcoinandnfts |