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

Abstract

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