Firm-Level cryptocurrency adoption and trading silence before anticipated information events
Li Gao, Junwoo Kim, Robert Kim, Sangwan Kim · Applied Economics Letters · 2025
Trading silence, defined as unusually low trading activity, before anticipated firm information events, is an important capital market phenomenon which hampers price discovery. Using unique data on firm-level cryptocurrency holdings extracted from the SEC filings, we find that trading silence before quarterly earnings announcements intensifies after a firm’s initial adoption of cryptocurrency. Moreover, we find that this effect is stronger for a subsample of firms reporting losses. Our findings are robust to the endogenous concern and to a difference-in-differences design with propensity score matching. Our study suggests that cryptocurrency held by corporations has a significant impact on equity investors’ willingness to engage in trading before anticipated firm announcements.