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Bubbles across Meme Stocks and Cryptocurrencies

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  • Aloosh, Arash
  • Ouzan, Samuel
  • Shahzad, Syed Jawad Hussain

Abstract

This study examines the price explosiveness of stocks whose purchase Robinhood restricted during the GameStop episode. We find that those “meme stocks” comprise multiple periods of explosiveness, indicating that they are unlikely to be an epiphenomenon. We also document evidence of price co-explosivity among meme stocks themselves and cryptocurrencies and meme stocks. Given the historical low correlation between the stock market and cryptocurrencies, our results highlight the impact of social media and emerging trading applications on interactions among equity and cryptocurrency markets, and their potentially destabilizing effects on both.

Suggested Citation

  • Aloosh, Arash & Ouzan, Samuel & Shahzad, Syed Jawad Hussain, 2022. "Bubbles across Meme Stocks and Cryptocurrencies," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003774
    DOI: 10.1016/j.frl.2022.103155
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    1. Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2023. "What do we know about meme stocks? A bibliometric and systematic review, current streams, developments, and directions for future research," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 589-602.
    2. Yousaf, Imran & Pham, Linh & Goodell, John W., 2023. "The connectedness between meme tokens, meme stocks, and other asset classes: Evidence from a quantile connectedness approach," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Price Explosiveness; Co-explosivity; Meme Stocks; Cryptocurrencies; GameStop; Social Trading;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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