Cryptocurrency Markets Moved by Regulatory Actions, Federal Reserve Bank Paper Shows

The Federal Reserve Bank of Dallas has published a paper showing how cryptocurrency markets are affected by crypto regulatory actions. The research also determines whether the authorities have some scope to make cryptocurrency regulation effective.

Influencing Cryptocurrency Markets and Prices

Last week, the Federal Reserve Bank of Dallas published a working paper entitled “Cryptocurrency Market Reactions to Regulatory News.” The 18-page report is an updated version of a paper by the same authors previously published by the Bank of International Settlements (BIS). It is co-authored by Raphael Auer, principal economist at the BIS, and Stijn Claessens, the BIS’ Head of Financial Stability Policy and Deputy Head of the Monetary and Economic Department.

The paper explores the effects of regulatory actions on cryptocurrency markets. The researchers found that the markets respond “most strongly to news events regarding the legal status of cryptocurrencies.” News of general bans on…