The effects of hacking events on bitcoin

Abstract

We examine the short‐term and long‐term effects of hacking events on bitcoin return. Additionally, we attempt to find out if investors can benefit from these events by adopting and modifying the models proposed by Baur et al. (2018) [ Journal of International Financial Markets, Institutions & Money, 54 , 177–189] who compare the performance of bitcoin against FX returns and the S&P500. The results show that hacking events present an opportunity for investors to make a profit if they invest in bitcoin, stocks and currencies. Such an opportunity, however, does not last for long.