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Emotional trading in the cryptocurrency market

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  • Ahn, Yongkil
  • Kim, Dongyeon

Abstract

We quantify the emotional factors inherited in 2,050,280 posts on Bitcointalk.org and investigate the impact of emotion on Bitcoin price fluctuations. Future Bitcoin returns are not associated with emotional factors, but Bitcoin trading volume and return volatility are significantly predicted by a catalog of emotions. Emotions affect the total return variation process of investors, and thus may influence the financial market by inducing extraordinary price movements.

Suggested Citation

  • Ahn, Yongkil & Kim, Dongyeon, 2021. "Emotional trading in the cryptocurrency market," Finance Research Letters, Elsevier, vol. 42(C).
    • Handle: RePEc:eee:finlet:v:42:y:2021:i:c:s1544612320317268
    DOI: 10.1016/j.frl.2020.101912
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    Cited by:

    1. Moser, Stefanie & Brauneis, Alexander, 2023. "Should you listen to crypto YouTubers?," Finance Research Letters, Elsevier, vol. 54(C).
    2. Ahn, Yongkil & Kim, Dongyeon, 2023. "Visceral emotions and Bitcoin trading," Finance Research Letters, Elsevier, vol. 51(C).
    3. Ahn, Yongkil, 2022. "Asymmetric tail dependence in cryptocurrency markets: A Model-free approach," Finance Research Letters, Elsevier, vol. 47(PB).

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    More about this item

    Keywords

    Emotion analytics; Bitcoin; Volatility;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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