Sentiment and trading decisions in an ambiguous environment: A study on cryptocurrency traders

Bowden, James; Gemayel, Roland

doi:10.1016/j.intfin.2022.101622

Cited by 8 publications

(2 citation statements)

References 44 publications

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“…This agrees with academic findings that when bullish sentiment dominates the market, investing in cryptocurrencies yields positive returns (Anamika et al 2021;Zhang and Zhang 2022). At the same time, positive changes in investor sentiment lead to investors trading larger amounts (Bowden and Gemayel 2022). Fluctuations in investors' psychological sentiments affect their risk appetite; positive sentiment encourages investors to buy riskier cryptocurrencies, thus increasing the price of cryptocurrencies.…”

Section: Model Regression Resultssupporting

confidence: 89%

Investor sentiment and the holiday effect in the cryptocurrency market: evidence from China

Zhang,

Xu,

Huang

et al. 2024

Financ Innov

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This study employs a fixed-effects model to investigate the holiday effect in the cryptocurrency market, using trading data for the top 100 cryptocurrencies by market capitalization on Coinmarketcap.com from January 1, 2017 to July 1, 2022. The results indicate that returns on cryptocurrencies increase significantly during Chinese holiday periods. Additionally, we use textual analysis to construct an investor sentiment indicator and find that positive investor sentiment boosts cryptocurrency market returns. However, when positive investor sentiment prevails in the cryptocurrency market, the holiday effect weakens, implying that positive investor sentiment attenuates the holiday effect. Robustness tests based on the Bitcoin market generate consistent results. Moreover, this study explores the mechanisms underlying the cryptocurrency holiday effect and examines the impact of epidemic transmission risk and heterogeneity characteristics on this phenomenon. These findings offer novel insights into the impact of Chinese statutory holidays on the cryptocurrency market and illuminate the role of investor sentiment in this market.

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Section: Model Regression Resultssupporting

confidence: 89%

Investor sentiment and the holiday effect in the cryptocurrency market: evidence from China

Zhang,

Xu,

Huang

et al. 2024

Financ Innov

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“…Specifically, the use of emotion statistics obtained via social media and based on a glossary of words allows for evaluating opinions depending on the severity of the pandemic and the interconnections between such feelings and cryptocurrencies (Corbet et al 2020 ). Bowden and Gemayel ( 2022 ) evidenced that emotion influences investors’ decisions because bullish sentiment generates positive returns for cryptocurrency traders. Umar and Gubareva ( 2020 ) claimed that cryptocurrency markets are highly responsive to overall sentiment and vulnerable to mainline anticipations, particularly throughout crises such as the COVID-19 pandemic.…”

Section: Prior Literaturementioning

confidence: 99%

Exploring the asymmetric effect of COVID-19 pandemic news on the cryptocurrency market: evidence from nonlinear autoregressive distributed lag approach and frequency domain causality

Gherghina

Simionescu

2023

Financ Innov

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This paper explores the asymmetric effect of COVID-19 pandemic news, as measured by the coronavirus indices (Panic, Hype, Fake News, Sentiment, Infodemic, and Media Coverage), on the cryptocurrency market. Using daily data from January 2020 to September 2021 and the exponential generalized autoregressive conditional heteroskedasticity model, the results revealed that both adverse and optimistic news had the same effect on Bitcoin returns, indicating fear of missing out behavior does not prevail. Furthermore, when the nonlinear autoregressive distributed lag model is estimated, both positive and negative shocks in pandemic indices promote Bitcoin’s daily changes; thus, Bitcoin is resistant to the SARS-CoV-2 pandemic crisis and may serve as a hedge during market turmoil. The analysis of frequency domain causality supports a unidirectional causality running from the Coronavirus Fake News Index and Sentiment Index to Bitcoin returns, whereas daily fluctuations in the Bitcoin price Granger affect the Coronavirus Panic Index and the Hype Index. These findings may have significant policy implications for investors and governments because they highlight the importance of news during turbulent times. The empirical results indicate that pandemic news could significantly influence Bitcoin’s price.

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Fan tokens: Sports and speculation on the blockchain

Scharnowski,

Zimmermann

2023

Journal of International Financial Markets, Institutions and Mo

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Sentiment and trading decisions in an ambiguous environment: A study on cryptocurrency traders

Cited by 8 publications

References 44 publications

Investor sentiment and the holiday effect in the cryptocurrency market: evidence from China

Investor sentiment and the holiday effect in the cryptocurrency market: evidence from China

Exploring the asymmetric effect of COVID-19 pandemic news on the cryptocurrency market: evidence from nonlinear autoregressive distributed lag approach and frequency domain causality

Fan tokens: Sports and speculation on the blockchain

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