Uncertainty in the financial regulation policy and the boom of cryptocurrencies
Finance Research Letters
The purpose of this research is to assess the impact of uncertain financial regulatory policy on the volatility of cryptocurrencies using the GARCH-MIDAS model. Further, we aim to identify whether the uncertainty in the financial regulation policy results in the boom of cryptocurrencies. The study's findings revealed that financial regulation policy uncertainty is negatively and significantly associated with the volatility of cryptocurrencies. Thus, an increase in uncertainty will ultimately decline the volatility. Furthermore, it implies that rapid fluctuations in the uncertainty of financial regulation policy strengthen the cryptocurrency market.
GARCH-MIDAS model, cryptocurrencies, uncertain financial regulatory policy.