Global Leadership Research Excellence Award

2014
Villanova Center (Honorable Mention)

Ph.D. Student Travel Grant

2016
Paper: "Do bank bailouts reduce or increase systemic risk? the effects of TARP on financial system stability?"

Semi-Finalist for the Best Paper Award at the Financial Management Association conference

Does Bank Technology Impact Small Business Lending Decisions?

Bank liquidity creation and real economic output

Governance mechanisms and effective activism: evidence from shareholder proposals on poison pills

Do bank bailouts reduce or increase systemic risk? the effects of TARP on financial system stability

What is the systemic risk exposure of financial institutions?

A comprehensive approach to measuring the relation between systemic risk exposure and sovereign debt

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Villanova University

Professor Sedunov's research and teaching interests include risk management, financial crises, banking, and systemic risk. He is a go-to media expert for Bitcoin and other cryptocurrencies as well as FinTech. Sedunov can also discuss the economic ramifications of political developments and policy changes.

Blockchain

Federal Reserve

Tariffs

Political Economy

Fintech

Cryptocurrencies

Financial Institutions

Risk Management

Systemic Risk and Financial Crises

Banking

International Mergers and Acquisitions

Alternative Investments

Bitcoin

Banking Regulation

Trade

Business

John Sedunov Personal Website

Google Scholar Page

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John Sedunov

the-rise-and-fall-of-cryptocurrencyagain

Professor of Finance and Real Estate | Villanova School of Business

2021 saw a meteoric rise in the value of Bitcoin and other cryptocurrencies. In addition, a reported 16% of Americans say they have invested in, traded or used cryptocurrency. 

But over the last two months, the value has dropped significantly. In September, El Salvador made Bitcoin a legal tender in the country and lost more than 20% of its investment in the four months since, resulting in the International Monetary Fund asking the country to stop its embrace of the currency.

We have seen this song and dance before with cryptocurrency values dramatically rising and falling, but where do we go from here? 

According to Villanova University's John Sedunov, PhD, an associate professor of finance, people might have invested in crypto as a hedge against rising inflation in the last year because there weren't alternatives to the stock market, which itself has seen its fair share of volatility. If that trend continues and inflation concerns aren't erased, more Americans could invest in crypto. 

As crypto continues to work its way into the everyday vernacular, there could be an interesting player to help bring it more mainstream: traditional banks. Recently, JPMorgan announced a $12 billion investment into technology. JPMorgan, which has already launched one of its own digital coins, is ahead of the competition. 

"I think if anything is going to lead the way, as backwards as it is, it will be the traditional banks, specifically JPMorgan," Dr. Sedunov said.  "Their reputation will bring competitors to market, allowing for the potential to become more mainstream."

One of the key things, Dr. Sedunov notes, is that there needs to be wide knowledge and understanding about how cryptocurrency, and the blockchain where it's stored, actually works. 

"Until it's easier to understand and explain and becomes common knowledge, it's going to be a rough ride. It has to get to the point where the utility and ease of use is not trivial. It's very easy to buy it, but to spend or move it, it's a painful process to avoid fees. It has to be easier to access."



The Rise and Fall of Cryptocurrency—Again

indebted-chinese-real-estate-developer-could-become-systemic-risk

Recent speculation surrounding the property developer China Evergrande Group caused the S&P 500 to have its worst day since May. But what we should look out for is systemic risk, according to John Sedunov, PhD, associate professor of finance at Villanova University. 

Evergrande currently has the biggest debt out of all publicly traded real-estate management or development companies. “The big issue seems to be Evergrande’s ability to repay its debt. The bigger issue is a potential for systemic crises or contagion to unfold,” said Dr. Sedunov. 

Another possibility is that Beijing could allow Evergrande to default. “Evergrande is a large Chinese developer, and the Chinese government may allow it to fail. It owes a lot of money to financial institutions and other market participants,” says Dr. Sedunov.

With these risks, assets were moved from stocks, oil and Bitcoin to much safer options.

“What’s potentially at stake is a contagion event where institutions with large exposure to Evergrande experience distress or fail as a result of lost cash flows they are expecting from Evergrande. This scenario is exacerbated if the company is allowed to fail,” said Dr. Sedunov.

 
Does this present any other future concerns?

Per Dr. Sedunov, Evergrande’s collapse could also impact the housing market. “More at issue is also that the real estate sector in China looks to be quite overheated (and it may be here as well), and this could be a signal of a collapse in real estate values, which again can bleed back into the financial system,” he said.




Indebted Chinese Real Estate Developer Could Become Systemic Risk

is-this-bitcoins-time-to-shine

Bitcoin was invented in 2008 and launched in 2009, but after years of skepticism, it's finally becoming a part of mainstream conversation. The cryptocurrency's value has continued to rise since 2017, but with the start of 2021, its price has surged and many more companies are looking for ways to get involved. 

Tesla and Square have invested. (You can even buy a Tesla with bitcoins.) Goldman Sachs and JPMorgan are exploring ways to meet customer demand for cryptocurrency investment. A National Football League player converted half of his salary into bitcoins. And Major League Baseball's Oakland Athletics are offering a suite for the 2021 season at the price of one bitcoin. So, if it's been around for so long, why are we only seeing this mainstream push now?

"I think the Bitcoin ecosystem is developing to the point where people can start to think about using it as a currency," said John Sedunov, PhD, an associate professor of finance who studies Bitcoin. "However, the price still remains volatile, and it isn't clear that the currency can maintain its current $50,00-to-60,000 value."

While there are companies adopting and investing now, this will still be a gradual process, Dr. Sedunov says.

"As businesses become better able to accept the currency, and perhaps more importantly better able to withstand and manage the volatility of Bitcoin, then the currency will become more widespread in its use. The process would be expedited if the entire supply chain accepted Bitcoin, rather than just the retailer and the end of the chain. This would smooth the process and allow people to utilize the currency without as much concern for converting it."

Additionally, Dr. Sedunov notes that there needs to be a continued evolution of the ability of firms to accept and manage the currency, in addition to a reduction in the volatility of the currency.  Smaller businesses may be at much more of a risk than large corporations and banks if there is price instability. 

But the value of Bitcoin won't be this high forever. As the country and economy continue to deal with the impact of the pandemic, there are growing concerns that inflation could be next, pushing consumers to other options, like cryptocurrency. 

"When the pandemic ends and there is, perhaps, more economic stability, Bitcoin's value will wane a bit, but I don't think it will fade to nothing," Sedunov notes. "The big question mark, to me, is the U.S. Dollar and inflation. Inflation expectations are rising, and this only pushes people more toward alternatives. If this trend continues, then perhaps economic stability will be a bit lower, and more people will flock toward Bitcoin."



Is This Bitcoin's Time to Shine?

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