Donghwa Shin

Assistant Professor of Finance, UNC Kenan-Flagler Business School

Donghwa Shin’s research interests center around FinTech, financial innovation and consumer finance. His recent research examines crowdfunding in the blockchain economy and manipulative trading practices in the cryptocurrency market.

In another line of research, Dr. Shin studies investors’ behavioral biases in the market for complex retail financial products.

Before he began his academic career, he worked as a machine learning engineer for three years in a startup in South Korea.

He received his PhD and MA in economics from Princeton University, and his BS in industrial engineering from Seoul National University.

Recent Publications

December 14, 2020

The tremendous growth in cryptocurrency trading has included frequent pump-and-dump (P&D) schemes, a form of price manipulation that is currently unregulated in this market. New research reveals that cryptocurrency P&Ds lead to price and volume inflations that last mere minutes, creating volatility that only benefits traders who have advance notice of the scheme.

Donghwa Shin

December 10, 2020

The cryptocurrency industry has evolved significantly over the last five years. It is no longer purely speculative; use cases that add real value are emerging, and with them, significant institutional interest. Rethinc. Fintech Labs Faculty Director and Professor of Finance Eric Ghysels recently sat down with Zoe Cruz, former co-president of Morgan Stanley, to discuss the impact of adding cryptocurrencies to a traditional portfolio.

Donghwa ShinEric Ghysels

May 1, 2019

Certification by online analysts and early investors can generate excitement among potential token investors, leading to successful initial coin offerings (ICOs). We test the general notion of "wisdom of crowds" using novel data on nearly 3,400 ICOs, including sequential investor subscriptions during token sales. We find that favorable analyst opinions on the underlying projects are associated with aggressive initial token subscriptions, fundraising success, and exchange listing. Analyst ratings also predict long-run token performance. Our results hold during the ICO market's boom-and-bust cycle. Overall, our results suggest analysts' intermediary role in ICOs, a type of direct placement in the FinTech era.

Donghwa Shin

October 23, 2018

Pump-and-dump schemes (P&Ds) are pervasive in the cryptocurrency market. We find that P&Ds lead to short-term bubbles featuring dramatic increases in prices, volume, and volatility. Prices peak within minutes and quick reversals follow. The evidence we document, including price run-ups before P&Ds start, implies significant wealth transfers between insiders and outsiders. Bittrex, a cryptocurrency exchange, banned P&Ds on November 24, 2017. Using a difference-in-differences approach, we provide causal evidence that P&Ds are detrimental to the liquidity and price of cryptocurrencies. We discuss potential mechanisms why outsiders are willing to participate and describe how our findings shed light on manipulation theories.

Donghwa Shin