Does cryptocurrency pricing response to regulatory intervention depend on underlying blockchain architecture?

Andrew Meegan, Shaen Corbet, Charles Larkin, Brian Lucey

Research output: Contribution to journalArticlepeer-review

16 Citations (SciVal)


Blockchain technology appears to be ready to revolutionise a broad number of industries. However, the blockchain itself contains a number of inefficiencies and areas for improvement, namely: transaction fees and transaction speeds. Directed acyclic graphs (DAGs) address, and improve on these inefficiencies and a number of digital currencies utilising this technology have already begun to appear. This paper provides an explanation of the technology behind DAG-based assets, while identifying and highlighting strategic advantages that DAGs possess over traditional blockchains. We conduct an EGARCH volatility analysis of a range of blockchain-based and DAG-based cryptocurrencies in the aftermath of a range of market shocks, taking the form of regulatory announcements such as bans and broad restrictions for cryptocurrencies. We find that DAG-based assets become increasingly responsive to market shocks as they mature. Such behaviour mirrors that of established cryptocurrencies such as Bitcoin, Ethereum and Litecoin, providing evidence that DAG-based cryptocurrencies now share similar characteristics to traditional blockchain-chain based products.

Original languageEnglish
Article number101280
JournalJournal of International Financial Markets, Institutions and Money
Early online date17 Dec 2020
Publication statusPublished - 1 Jan 2021

Bibliographical note

Publisher Copyright:
© 2020 The Author(s)

Copyright 2020 Elsevier B.V., All rights reserved.


  • Blockchain
  • Cryptocurrency
  • Digital currencies
  • Directed acyclic graphs

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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