Open Access Journal Article

Modeling the Potential Impact of Government Regulation on Cryptocurrency Prices

by Kylie LoPiccolo a  and  Francis Parisi b,* orcid
a
Department of Information Technology, Pace University, New York, USA
b
Department of Computer Science, Pace University, New York, USA
*
Author to whom correspondence should be addressed.
EAL  2023, 28; 2(3), 28; https://doi.org/10.58567/eal02030002
Received: 25 April 2023 / Accepted: 20 May 2023 / Published Online: 30 May 2023
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Abstract

Cryptocurrencies have gained popularity over the past five to six years. Most recently, events like the FTX bankruptcy fueled the interest in regulation. Moreover, it is possible that the FTX event disrupting the cryptocurrency market was a factor in Silicon Valley Bank's failure. While several countries consider regulation, from soft regulation, like Japan, to more rigid standards, like the total ban in China, we study the effect of other news or events on cryptocurrency prices. This paper looks at historical closing prices for Bitcoin, the largest of the cryptocurrencies, and how prices react to various events. Then we focus on modeling the time series considering an 'event,' China's ban on cryptocurrency exchanges, using intervention analysis. We find that intervention analysis provides a reliable approach to quantifying the impact regulation may have on cryptocurrency pricing.

Keywords: Time-series models; Intervention analysis; Government policy and regulation; Asset pricing;
Copyright: © 2023 by LoPiccolo and Parisi. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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ACS Style
LoPiccolo, K.; Parisi, F. Modeling the Potential Impact of Government Regulation on Cryptocurrency Prices. Economic Analysis Letters, 2023, 2, 28. https://doi.org/10.58567/eal02030002
AMA Style
LoPiccolo K, Parisi F. Modeling the Potential Impact of Government Regulation on Cryptocurrency Prices. Economic Analysis Letters; 2023, 2(3):28. https://doi.org/10.58567/eal02030002
Chicago/Turabian Style
LoPiccolo, Kylie; Parisi, Francis 2023. "Modeling the Potential Impact of Government Regulation on Cryptocurrency Prices" Economic Analysis Letters 2, no.3:28. https://doi.org/10.58567/eal02030002
APA style
LoPiccolo, K., & Parisi, F. (2023). Modeling the Potential Impact of Government Regulation on Cryptocurrency Prices. Economic Analysis Letters, 2(3), 28. https://doi.org/10.58567/eal02030002

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