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News sentiment and DeFi coin returns: An empirical analysis

Author

Listed:
  • Akyildirim, Erdinc
  • Aysan, Ahmet Faruk
  • Cepni, Oguzhan
  • Corbet, Shaen

Abstract

This study investigates the influence of news-based sentiment on the returns of Decentralized Finance (DeFi) coins using a sample of 27 coins from January 2017 to March 2022. Our results indicate that news sentiment significantly impacts DeFi returns, with negative sentiment exerting a stronger influence than positive sentiment. Transaction volume and network security also emerge as critical drivers of DeFi coin returns. Smaller coins are more sensitive to news sentiment, showing greater return volatility. The impact of news-based sentiment is more pronounced during weekdays, likely due to reduced participation by institutional investors and trading algorithms. These findings have important implications for investors and policymakers, suggesting multiple pathways for market manipulation under specific conditions.

Suggested Citation

  • Akyildirim, Erdinc & Aysan, Ahmet Faruk & Cepni, Oguzhan & Corbet, Shaen, 2025. "News sentiment and DeFi coin returns: An empirical analysis," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s105905602500646x
    DOI: 10.1016/j.iref.2025.104483
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    Keywords

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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