THE IMPACT OF ANNOUNCEMENTS ON CRYPTOCURRENCY PRICES

SIDOROV Andrei, Alexandru Ioan Cuza University of Iasi

Abstract:
The study examines the influence of public announcements, regulatory actions, and significant events on the price movements of Bitcoin, Ethereum, Ripple, and Dogecoin, focusing on market volatility and stability. Historical exchange rate data, covering the period from 03 June 2017 to 27 October 2024, with over 2700 daily price observations, were analyzed. The primary aim was to explore how these events shape cryptocurrency price reactions, uncover patterns in market behavior, and assess market sentiment. The findings reveal that volatile assets like Dogecoin experience more pronounced and longer-lasting price changes in response to positive announcements, while more stable cryptocurrencies such as Bitcoin and Ethereum show relatively brief price shifts. Negative events, especially those involving regulatory actions or market disruptions, tend to have a prolonged and detrimental effect on cryptocurrency prices. Additionally, the study highlights the growing stability of the cryptocurrency market, driven by an expanding user base. Bitcoin and Ethereum exhibit moderate volatility, while Dogecoin and Ripple show higher volatility. The research also identifies correlations between cryptocurrencies, such as the strong relationship between Bitcoin and Ethereum, suggesting potential for price manipulation between correlated assets. Investor sentiment plays a crucial role in amplifying the effects of both positive and negative events, with favorable sentiment driving price increases and negative sentiment contributing to market declines. The research provides valuable insights for investors, enabling them to navigate cryptocurrency market volatility and make more informed investment decisions.

Keywords: market manipulation, cryptocurrency volatility, announcement effect, cryptocurrency news sentiment, cryptocurrency daily returns, market capitalization, cryptocurrency market dynamics, cryptocurrencie

JEL Classification: G14, G15, G41, C58, C55, C63, C45, O33, E44

Volume: 76, Issue: 4

Pages: 69 - 94

Publication date: December, 2024

DOI: 10.56043/reveco-2024-0035

Download the article: http://economice.ulbsibiu.ro/revista.economica/archive/76405sidorov.pdf

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