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Uncertainty in the financial regulation policy and the boom of cryptocurrencies

Author

Listed:
  • Syed Ali Raza

    (Audencia Business School)

  • Komal Akram Khan
  • Khaled Guesmi
  • Ramzi Benkraiem

Abstract

The purpose of this research is to assess the impact of uncertain financial regulatory policy on the volatility of cryptocurrencies using the GARCH-MIDAS model. Further, we aim to identify whether the uncertainty in the financial regulation policy results in the boom of cryptocurrencies. The study's findings revealed that financial regulation policy uncertainty is negatively and significantly associated with the volatility of cryptocurrencies. Thus, an increase in uncertainty will ultimately decline the volatility. Furthermore, it implies that rapid fluctuations in the uncertainty of financial regulation policy strengthen the cryptocurrency market.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Syed Ali Raza & Komal Akram Khan & Khaled Guesmi & Ramzi Benkraiem, 2023. "Uncertainty in the financial regulation policy and the boom of cryptocurrencies," Post-Print hal-03981910, HAL.
    • Handle: RePEc:hal:journl:hal-03981910
    DOI: 10.1016/j.frl.2022.103515
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    Cited by:

    1. Zhao, Yang & Zhang, Maojun & Pei, Ziting & Nan, Jiangxia, 2023. "The effects of quantitative easing on Bitcoin prices," Finance Research Letters, Elsevier, vol. 57(C).
    2. Wang, Nianling & Yin, Jiyuan & Li, Yong, 2024. "Economic policy uncertainty and stock market volatility in China: Evidence from SV-MIDAS-t model," International Review of Financial Analysis, Elsevier, vol. 92(C).
    3. Huachen Li & Tiezheng Song, 2024. "Regime dependent dynamics of parallel and official exchange markets in China: evidence from cryptocurrency," Applied Economics, Taylor & Francis Journals, vol. 56(41), pages 4952-4973, September.
    4. Mei-jun, Ling & Guang-xi, Cao, 2024. "Dynamics of asymmetric multifractal cross-correlations between cryptocurrencies and global stock markets: Role of gold and portfolio implications," Chaos, Solitons & Fractals, Elsevier, vol. 182(C).
    5. Monika Eisenbardt & Tomasz Eisenbardt, 2023. "Can Cryptocurrencies Be Feasibly Adopted as a National Currency? The Perspective of the Younger Generation," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 463-481.
    6. Anh Thi Phuong Hoang & Bao Cong Nguyen To & Hoang Dinh Tran, 2025. "Safe havens in the digital age: Cryptocurrencies and geopolitical risks," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 15(3), pages 160-180.
    7. Sakariyahu, Rilwan & Lawal, Rodiat & Adigun, Rasheed & Paterson, Audrey & Johan, Sofia, 2024. "One crash, too many: Global uncertainty, sentiment factors and cryptocurrency market," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 94(C).
    8. Chikashi Tsuji, 2025. "The risk–return trade-off of Bitcoin: Evidence from regime-switching analysis," Future Business Journal, Springer, vol. 11(1), pages 1-25, December.
    9. rao, amar & Dagar, Vishal & dagher, leila & Shobande, Olatunji, 2024. "Uncertainty and Risk in Cryptocurrency Markets: Evidence of Time-frequency Connectedness," MPRA Paper 120582, University Library of Munich, Germany.
    10. Baeckström, Ylva & Jalan, Akanksha & Matkovskyy, Roman, 2024. "The role of promotion versus prevention-orientation to predict individual cryptocurrency participation," Finance Research Letters, Elsevier, vol. 67(PA).
    11. Artor Nuhiu & Florin Aliu & Jakub Horák & Bedri Peci, 2023. "Making Informed Decisions in the Volatile Crypto Market: An Analysis of Portfolio Risk and Return," SAGE Open, , vol. 13(3), pages 21582440231, August.
    12. Wang, Qingyu & Huang, Qing & Wu, Xiangfang & Tan, Jin & Sun, Panxu, 2023. "Categorical uncertainty in policy and bitcoin volatility," Finance Research Letters, Elsevier, vol. 58(PC).
    13. Raza, Syed Ali & Khan, Komal Akram & Benkraiem, Ramzi & Guesmi, Khaled, 2024. "The importance of climate policy uncertainty in forecasting the green, clean and sustainable financial markets volatility," International Review of Financial Analysis, Elsevier, vol. 91(C).
    14. Guo, Kun & Liu, Fengqi & Sun, Xiaolei & Zhang, Dayong & Ji, Qiang, 2023. "Predicting natural gas futures’ volatility using climate risks," Finance Research Letters, Elsevier, vol. 55(PA).
    15. C. Vladimir Rodríguez-Caballero & Mauricio Villanueva-Domínguez, 2022. "Predicting cryptocurrency crash dates," Empirical Economics, Springer, vol. 63(6), pages 2855-2873, December.

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