The Russian War in Ukraine and its Effect in the Bitcoin Market

Abstract

Purpose:In this paper, we analyze the impact of the war in Ukraine on the price and volume volatility of bitcoin. Design/methodology/approach: We apply a two-stage methodology, to explore whether bitcoin price and volume were affected by the Ukraine war event, and to analyze the magnitude of this effect. Findings: Our results show that the Ukraine war affected more bitcoin volume, than bitcoin price. Practical implications: We explore whether the effect of a major political event, such as the war in Ukraine, is differentiated between bitcoin price and volume respectively, and we show that volume is affected much more than price. This has important practical implications for traders and investors in the crypto-market, since bitcoin is gradually perceived as an asset that can bear portfolio diversifying features. Originality value: Our results are surprizing since prior event literature shows that bitcoin price is heavily affected by major political and economic events, but is in line with the only to-date study of Bitcoin price and Ukraine war (Yatie, 2022).