IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-981-99-5447-6_6.html
   My bibliography  Save this book chapter

Reaction and Efficiency of the Cryptocurrency Market During the COVID-19 Pandemic: The Effect of Size and Supply

In: Contemporary Issues in Finance, Investment and Banking in Malaysia

Author

Listed:
  • Ruzita Abdul Rahim

    (Universiti Kebangsaan Malaysia)

  • Nur Arissa Maisarah Nadhri

    (Universiti Kebangsaan Malaysia)

  • Noor Azryani Auzairy

    (Universiti Kebangsaan Malaysia)

  • Syahida Zainal Abidin

    (Universiti Kebangsaan Malaysia)

Abstract

The COVID-19 pandemic might be bad news for all economic units, but it has become an unprecedented push factor for cryptocurrencies. These digital currencies have received overflowing investment through capital withdrawn from traditional investment instruments such as stocks and bonds. This chapter investigates the reaction and efficiency of Bitcoin and 40 altcoins from the World Health Organization’s announcement of the COVID-19 pandemic on 11 March 2020 and the first vaccination approval on 31 December 2020. Using the event study approach for the observation period from 1 January 2019 until 31 October 2021, we find that their reactions are significant and increasingly positive on the longer event windows. We also find that the size effect is highly significant in the cryptocurrency market compared to the stock markets. Cryptocurrencies with saturated supply react more drastically than those with unlimited supply, but the impact of supply is less pronounced than size. Meanwhile, Bitcoin appears to be more efficient than all altcoins except for the five largest cap. The results of this study would be beneficial for investors, particularly those searching for a safe haven or hedger in the cryptocurrency market.

Suggested Citation

  • Ruzita Abdul Rahim & Nur Arissa Maisarah Nadhri & Noor Azryani Auzairy & Syahida Zainal Abidin, 2024. "Reaction and Efficiency of the Cryptocurrency Market During the COVID-19 Pandemic: The Effect of Size and Supply," Springer Books, in: Zulkefly Abdul Karim & Ruzita Abdul Rahim & Wai Yan Wong & Siti Farah Dilla Zakaria (ed.), Contemporary Issues in Finance, Investment and Banking in Malaysia, pages 81-104, Springer.
    • Handle: RePEc:spr:sprchp:978-981-99-5447-6_6
    DOI: 10.1007/978-981-99-5447-6_6
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-981-99-5447-6_6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.