IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v49y2026ics2214635026000043.html

Gambling on Bitcoin options?

Author

Listed:
  • Flynn, Matthew
  • Liu, Yifan

Abstract

Bitcoin options have rapidly emerged as a major derivatives market built on an underlying asset characterized by extreme volatility and high levels of speculation. This setting provides a natural environment to study how gambling related preferences influence investor behavior. Specifically, this study examines how state-level gambling propensity drives investor attention to Bitcoin options and affects market outcomes. Through the collection of Google Trends search volumes, we find that local gambling propensity significantly increases attention to Bitcoin options. Exploiting staggered sports betting legalization, we find low-friction gambling substitutes reduce Bitcoin option attention in high-gambling states, consistent with substitution among entertainment venues. Gambling propensity increases option volume, open interest, and preference for out-of-the-money contracts, while attention increases underlying Bitcoin volatility. These findings highlight distinct behavioral channels through which gambling motives and attention shocks influence Bitcoin options and spot markets.

Suggested Citation

  • Flynn, Matthew & Liu, Yifan, 2026. "Gambling on Bitcoin options?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:beexfi:v:49:y:2026:i:c:s2214635026000043
    DOI: 10.1016/j.jbef.2026.101142
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635026000043
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jbef.2026.101142?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:beexfi:v:49:y:2026:i:c:s2214635026000043. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.