Employing representative data from the U.S. Survey of Consumer Payment Choice, we disprove the hypothesis that cryptocurrency investors are motivated by distrust in fiat currencies or regulated finance. Compared with the general population, investors show no differences in their level of...

Cryptocurrencies are often thought to operate out of the reach of national regulation, but in fact their valuations, transaction volumes and user bases react substantially to news about regulatory actions. The impact depends on the specific regulatory category to which the news relates: events...

Just as network effects can dramatically increase value through positive feedback, value can be lost as networks shrink due to competition or incompatibility. In the instance of cryptocurrency as a network and with Metcalfe's Law as the methodology, we illustrate by numerical example that...

This paper conducts a first look into the regulated Bitcoin options market in the United States. Compared to stock options, bitcoin options tend to be ten times more illiquid as measured by bid-ask spreads. The illiquidity significantly affects bitcoin options pricing: Given that investors are...

The phenomenal growth of cryptocurrencies raises important questions about their footprint on the financial system. What role are traditional financial intermediaries playing in cryptocurrency markets and what drives their engagement? Are new nodes emerging? We help answer these questions by...

We propose a mechanism explaining the recent high positive correlation between cryptocurrencies and the stock market. With a unique dataset of investor-level holdings from a bank offering trading accounts and cryptocurrency wallets, we show that retail investors’ net trading volumes of stocks...

In this study, we examine the spillover of Bitcoin’s jumps and diffusive variations to traditional assets using high frequency data. For our cross-asset study, we detect positive spillovers from Bitcoin to risk assets and negative spillovers to defensive assets. We also find evidence of...

In this study, we examine the cross-excitation effects of Bitcoin’s jumps and diffusive variations on traditional asset classes using high frequency data. For our cross-asset study, we detect the presence of positive jump spillovers from Bitcoin to risk assets and negative jump spillovers from...

This paper uncovers a novel phenomenon, flight-to-Bitcoin, during periods of heightened policy uncertainties. Panel regressions show that Bitcoin premia, turnovers, and Web traffic on cryptocurrency exchanges all increase with economic policy uncertainties. Difference-in-differences tests...