Are cryptocurrency traders pioneers or just risk-seekers? Evidence from brokerage accounts

Pelster, Matthias; Breitmayer, Bastian; Hasso, Tim

doi:10.1016/j.econlet.2019.06.013

Cited by 59 publications

(25 citation statements)

References 9 publications

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“…This result is in line with the findings inPelster et al (2019) that the overall behavior of investors who enter crypto markets is driven by excitement-seeking, by an intentional strategy to enter a new promising asset class and by diversification purposes. This type of trading behavior can cause speculative price bubbles, as documented byGandal et al (2018).…”

supporting

confidence: 91%

Distant or close cousins: Connectedness between cryptocurrencies and traditional currencies volatilities

Félix

Fernández-Pérez

Sosvilla‐Rivero

2020

Journal of International Financial Markets, Institutions and Mo

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Institute of Applied Economics (IREA) in Barcelona was founded in 2005, as a research institute in applied economics. Three consolidated research groups make up the institute: AQR, RISK and GiM, and a large number of members are involved in the Institute. IREA focuses on four priority lines of investigation: (i) the quantitative study of regional and urban economic activity and analysis of regional and local economic policies, (ii) study of public economic activity in markets, particularly in the fields of empirical evaluation of privatization, the regulation and competition in the markets of public services using state of industrial economy, (iii) risk analysis in finance and insurance, and (iv) the development of micro and macro econometrics applied for the analysis of economic activity, particularly for quantitative evaluation of public policies.IREA Working Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. For that reason, IREA Working Papers may not be reproduced or distributed without the written consent of the author. A revised version may be available directly from the author.Any opinions expressed here are those of the author(s) and not those of IREA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions.

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supporting

confidence: 91%

Distant or close cousins: Connectedness between cryptocurrencies and traditional currencies volatilities

Félix

Fernández-Pérez

Sosvilla‐Rivero

2020

Journal of International Financial Markets, Institutions and Mo

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“…Thus, the results of this study suggest that some investors resort to the Bitcoin market as a substitute for gambling. The results also confirm prior literature documenting that some investors are seeking risk and excitement when they trade cryptocurrencies [13,14].…”

Section: Discussion and Concluding Remarkssupporting

confidence: 87%

“…The authors show that individual investors trade less on large jackpot days or, equivalently, that there is a substitution effect between stock trading and lottery participation. Recent literature has also documented that some investors are only seeking risk and excitement when they trade cryptocurrencies [13,14]. The lottery-like features of Bitcoin returns together with the COVID-19 pandemic shock provide an interesting setting to examine the predictions from previous literature proposing that some people trade for fun and excitement.…”

Section: Introductionmentioning

confidence: 99%

Trading Cryptocurrencies as a Pandemic Pastime: COVID-19 Lockdowns and Bitcoin Volume

2021

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This paper examines the impact of COVID-19 lockdowns on Bitcoin trading volume. Using data from Apple mobility trends and several time-series econometric models, we find that investors became active participants during the COVID-19 pandemic period and traded more bitcoins on days with low mobility associated with lockdown mandates. These results remain robust after controlling for stocks and gold returns, the VIX index, and the level of attention and sentiment toward Bitcoin, as measured by Google search frequencies and the tone of Tweets discussing Bitcoin. These results suggest that when individual investors have ample free time on their hands, they trade cryptocurrencies as a pastime and use the Bitcoin market as a form of entertainment. Moreover, our results have important implications concerning investors’ herding behavior and overconfidence leading to noise trader risks and bubbles typically accompanied by high trading volume in cryptocurrency markets.

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“…However, the COVID-19 relationship in cryptocurrency markets remains unexplored. Bitcoin and other cryptocurrencies are considered as financial asset and highly volatile (Bouoiyour et al , 2014; Bouri et al , 2018; Sahoo, 2017; Kostika and Laopodis, 2019; Hu et al , 2019; Miglietti et al , 2020; Pelster et al , 2019; Sahoo, 2020) and better hedging capabilities over other financial assets such as stocks and US dollar (Dyhrberg, 2016). As a result, during the pandemic, investors have tried to diversify their portfolio toward cryptocurrencies to take short-term gain.…”

Section: Introductionmentioning

confidence: 99%

COVID-19 pandemic and cryptocurrency markets: an empirical analysis from a linear and nonlinear causal relationship

Sahoo

2021

SEF

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Purpose This paper aims to empirically examine the effect of Coronavirus disease 2019 (COVID-19) pandemic on cryptocurrency market returns with particular attention to top five cryptocurrencies and COVID-19 confirmed and death cases. Design/methodology/approach The study applies the linear Toda and Yamamoto and nonlinear Diks and Panchenko Granger causality test to know the causal relationship of cryptocurrencies with COVID-19 pandemic. The study also uses the Narayan and Popp endogenous two structural break tests to capture the break period of the sample. Findings The findings of the study confirm the existence of unidirectional causal relation from COVID-19 confirmed and death cases to cryptocurrency price returns. While examining the break periods, the post-break period result indicates the presence of unidirectional linear causality from COVID-19 confirmed cases to Bitcoin and Ethereum price returns. This shows that prior knowledge of COVID-19 pandemic growth helps to predict the return of cryptocurrencies. Originality/value The study suggests the investors or crypto lovers to observe the growth of COVID-19 situations during their investment in cryptocurrency markets.

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Are cryptocurrency traders pioneers or just risk-seekers? Evidence from brokerage accounts

Cited by 59 publications

References 9 publications

Distant or close cousins: Connectedness between cryptocurrencies and traditional currencies volatilities

Distant or close cousins: Connectedness between cryptocurrencies and traditional currencies volatilities

Trading Cryptocurrencies as a Pandemic Pastime: COVID-19 Lockdowns and Bitcoin Volume

COVID-19 pandemic and cryptocurrency markets: an empirical analysis from a linear and nonlinear causal relationship

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