Informed Trading through the COVID-19 Pandemic: Evidence From the Bitcoin Market

Abstract

We investigate informed trading in the Bitcoin market throughout the COVID-19 pandemic. Compared to the pre-pandemic period, we find that informed trading is significantly higher in the affective first stage of the pandemic, before reverting to its pre-COVID-19 level during the later stage of the pandemic. Furthermore, information asymmetry tends to increase in daily COVID-19-related news: confirmed cases and deaths. Our findings are robust to alternative parameters and model specifications. The main implication for traders is that they should be extra cautious in timing their trading decisions during such events, as these tend to encourage informed trading. © 2026 by the authors.