Delayed stock market reactions to blockchain investment announcements: evidence from the US and Hong Kong stock markets

Abstract

Markets exhibit systematic delays in price adjustment to complex technology announcements, with institutional differences generating markedly divergent valuation outcomes. This study investigates whether blockchain investment announcements generate abnormal returns and examines how institutional environments are associated with the timing and magnitude of market reactions in the US and Hong Kong markets. The comparison is framed as a contrast between two distinct institutional environments rather than as a literal developed-versus-emerging market dichotomy. Using an event study methodology with extended windows, we analyse 124 announcements during 2020–2025. Neither market exhibits a significant reaction on the announcement day, contradicting the efficient market hypothesis. US markets generate substantial positive cumulative abnormal returns, with peak reactions occurring four to six trading days after the announcement, while the Hong Kong Exchanges and Clearing Limited (HKEX) shows no statistically robust cumulative effect in the main event window, producing pronounced cross-market differentials that exceed those reported in prior cross-border studies. Patterns suggest some pre-announcement trading activity in US markets and an initial positive movement followed by a subsequent correction in the Hong Kong market. The findings suggest that supplementary disclosures detailing commercial purpose and regulatory readiness can reduce information-processing lags. For policymakers, the results highlight that regulatory clarity is a first-order determinant of technology valuation in emerging markets. To the best of our knowledge, this is the first cross-market event study examining market reactions to blockchain investment announcements in the US and Hong Kong. The study shows that blockchain's technical complexity and regulatory sensitivity amplify information-processing delays, even in sophisticated markets, and generate cross-market valuation differences that exceed those documented in prior cross-border studies. We advance emerging markets research by demonstrating how institutional contrasts involving a distinctively hybrid and institutionally constrained market environment are associated with the value consequences of adopting a novel technology and the efficiency with which that technology is valued once announced.