Effect of Ukraine-Russia Conflict on the Cryptocurrency Market: an Event Study Perspective

Abstract

Russia massively invaded Ukraine on February 24, 2022, unavoidably having an effect on the world economy and finance. This paper uses the event study to research the short-term response of the February 2022 top 5 variable-price cryptocurrencies (BTC, ETH, BNB, XRP, SOL) to the Russia-Ukrainian war under the constant mean model. The cryptocurrency volatility was dramatic during the event window, and cryptocurrencies did not show the characteristics of safe haven. Overall, the result of the effect of the Russia-Ukraine war on the cryptocurrency market was negative, with the least negative impact on SOL and the most negative impact on BNB, XRP. Finally, Using the different event window analysis, it shows the cryptocurrency market return volatility rebounded, but it does not sufficiently indicate there is a positive trend in the cryptocurrency market after the event. The analysis of this paper can provide some help for cryptocurrency investors in the event of unforeseen circumstances. And in the data selection, this paper doesn’t consider stablecoins.