Hard forks, hard questions: Unraveling the microstructure effects on Bitcoin’s return, volume, and volatility

We analyze 52 Bitcoin hard forks using minute-level local projections to assess their impact on Bitcoin’s returns, volume, and volatility following the planned split. Trading volume shows significant effects, while returns and volatility remain unaffected. Our findings suggest that governance splits trigger immediate trading activity, while price and volatility consequences likely emerge over longer horizons. These results remain robust to the omission of major forks. This study provides insights for future debates on controversial protocol changes, such as those concerning quantum resistance and efforts to make Bitcoin more energy efficient. • Insights prepare investors for future blockchain governance issues. • We provide insights into Bitcoin’s microstructure dynamics following its forks. • We estimate impulse response functions using local projections. • A statistically significant effect was found for volume.