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Investor Sentiments and Bitcoin Volatility: Empirical Evidence from Cryptocurrency Market

Author

Listed:
  • Mubashir Zaman
  • Dr. Surayya Jamal
  • Humma Abid
  • Farhan Ahmad

Abstract

The present study goals to examine the impact of investors’ sentiment, such as overconfidence, optimism, pessimism, and reasonable investor expectations, on Bitcoin currency. Therefore, daily Bitcoin trading data was taken from CoinMarketCap. The data period consists of January 2023 to December 2024. The unit root stationary, GARCH (1,1) model and ordinary least square (OLS) regression test were used. The unit root stationary (ADF) test results reveal that all variables are stationary at level. The GARCH (1,1) model suggests that the lagged trading volume has a considerable positive influence on the current Bitcoin trade volume. Further GARCH (1,1) results demonstrate that optimism has a positive significant impact on and pessimism has a negative significant influence on Bitcoin exchange volume. Whereas ordinary least square regression (OLS) models also show that optimism has a positive significant impact and pessimism has a negative impact on Bitcoin trade volume. The study has various suggestions for stakeholders, investors, policymakers, and researchers.

Suggested Citation

  • Mubashir Zaman & Dr. Surayya Jamal & Humma Abid & Farhan Ahmad, 2025. "Investor Sentiments and Bitcoin Volatility: Empirical Evidence from Cryptocurrency Market," International Journal of Politics & Social Sciences Review (IJPSSR), International Journal of Politics & Social Sciences Review (IJPSSR), vol. 4(I), pages 97-103.
    • Handle: RePEc:ebj:ijpssr:2025v4iia8
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