Country-level cryptocurrency uncertainty and bank cost of capital
Country-level cryptocurrency uncertainty and bank cost of capital
This study explores the impact of country-level cryptocurrency uncertainty on bank cost of capital, utilizing data from 63 countries over the period of 2009 to 2023. Our findings indicate that cryptocurrency uncertainty is associated with a reduction in banks’ cost of capital. This result remains robust using alternative proxies and controlling for endogeneity concerns. Additionally, we document that the impact is more pronounced for banks with low market competition, and high interest margin. These results provide valuable insights for policymakers and industry practitioners regarding the implications of cryptocurrency uncertainty on financial institutions.
Bank competition, Cost of debt, Cost of equity, Cryptocurrency uncertainty, Default risk, Google trends, Stability
Noman, Abu Hanifa Md
71108294-584d-4d58-a038-df56bc117908
Abdullah, Mohammad
5cfdc593-d09a-415b-ba1b-fc9b830cb776
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889
Noman, Abu Hanifa Md
71108294-584d-4d58-a038-df56bc117908
Abdullah, Mohammad
5cfdc593-d09a-415b-ba1b-fc9b830cb776
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889
Noman, Abu Hanifa Md, Abdullah, Mohammad and Yarovaya, Larisa
(2025)
Country-level cryptocurrency uncertainty and bank cost of capital.
Economics Letters, 256, [112614].
(doi:10.1016/j.econlet.2025.112614).
Abstract
This study explores the impact of country-level cryptocurrency uncertainty on bank cost of capital, utilizing data from 63 countries over the period of 2009 to 2023. Our findings indicate that cryptocurrency uncertainty is associated with a reduction in banks’ cost of capital. This result remains robust using alternative proxies and controlling for endogeneity concerns. Additionally, we document that the impact is more pronounced for banks with low market competition, and high interest margin. These results provide valuable insights for policymakers and industry practitioners regarding the implications of cryptocurrency uncertainty on financial institutions.
Text
1-s2.0-S0165176525004513-main
- Version of Record
More information
Accepted/In Press date: 11 September 2025
e-pub ahead of print date: 11 September 2025
Additional Information:
Publisher Copyright:
© 2025 The Author(s)
Keywords:
Bank competition, Cost of debt, Cost of equity, Cryptocurrency uncertainty, Default risk, Google trends, Stability
Identifiers
Local EPrints ID: 507126
URI: http://eprints.soton.ac.uk/id/eprint/507126
ISSN: 0165-1765
PURE UUID: cd9060c2-d37f-4125-a31b-51fbf07220f5
Catalogue record
Date deposited: 27 Nov 2025 17:45
Last modified: 28 Nov 2025 02:54
Export record
Altmetrics
Contributors
Author:
Abu Hanifa Md Noman
Author:
Mohammad Abdullah
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
