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Cryptocurrencies and Cybercrime: The Effects of Ransom Events on the Evolution of Bitcoin

With the explosion of Bitcoin, various cryptocurrencies are beginning to garner incredible amounts of attention from speculators and institutional investors alike. Simultaneously, the rise in the number of occurrences of cyber ransom attacks has proven to be an increasingly relevant part of the conversation in the formative years of the Bitcoin ecosystem, as hackers demand payments be in the form of bitcoin. To test the relative impact of these different ransom events on the price of bitcoin, this paper conducts an event study to quantify the reaction by investors upon revelation of the news. In addition, it examines differences between Bitcoin and two other cryptocurrencies, Ethereum and Litecoin, to control for any liquidity effects of victims buying up large sums of bitcoin. The findings of the study indicate that following the ransom events there is a positive price reaction, supporting the claim that investors in Bitcoin generally perceive these events as good news. This could have a profound effect on the development and further adoption of cryptocurrencies, as regulators try to determine whether or not to intervene.

Identiferoai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-2830
Date01 January 2018
CreatorsWilson, Jacob
PublisherScholarship @ Claremont
Source SetsClaremont Colleges
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceCMC Senior Theses
Rights© 2017 Jacob T. Wilson, default

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