The Impact of Cryptocurrency-Related Cyberattacks on Cryptocurrencies and Traditional Financial Assets

Abstract

This thesis investigates the impact of cryptocurrency-related cyberattacks on the\ncryptocurrency market as well as on traditional financial markets. We utilize a\ndataset consisting of historical data on cyberattacks and daily trading data for\ntwenty cryptocurrencies, five payment system stocks, four stock indices and one\ncommodity, over the sample period of December 27, 2013 - December 31, 2019.\nRegarding the impact on cryptocurrencies, we find that cryptocurrency-related\ncyberattacks are associated with negative returns, increased volatility and increased\ntrading volume. The size of the impact depends on the magnitude of the\ncyberattack and this impact is decreasing over time. Furthermore, the results\nprovide evidence that cryptocurrency-related cyberattacks are associated with\nnegative returns and elevated volatility not only for cryptocurrencies, but also for\npayment companies, the financial and technology sectors, and the general stock\nmarket. On the other hand, these attacks are associated with positive returns for\ngold, and their impact on the commodity index is insignificant.