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Time and frequency domain relationship between investor sentiment and sectoral cryptocurrencies

Author

Listed:
  • Samet Gunay

    (Corvinus University of Budapest)

  • Emrah Ismail Cevik

    (Tekirdag Namık Kemal University
    Azerbaijan State University of Economics (UNEC))

  • Mehmet Fatih Bugan

    (Gaziantep University)

  • Sel Dibooglu

    (Missouri Western State University)

  • Mehmet Akif Destek

    (Gaziantep University
    Azerbaijan State University of Economics (UNEC)
    Korea University
    Western Caspian University)

Abstract

Utilizing blockchain technology is transforming traditional business practices into a new paradigm, giving rise to what we refer to as blockchained models. This paper uses wavelet coherence analysis to identify the connectedness of blockchained sectoral indices with Bitcoin and the Fear and Greed Index that represents investor sentiment in the cryptocurrency market. Results show persistent and positive correlations between sector returns and investor sentiment and sectoral return series lead investor sentiment. The relationship between Bitcoin and sectoral indices is consistent for return series and suggests an in-phase (positive) relationship between these variables at all frequencies. We usually have found negative correlations for the co-movements of investor sentiment and sectoral volatility, where investor sentiment leads to sector return volatilities. The application of blockchain technology across various sectors, coupled with the proliferation of altcoins, appears to drive distinct price developments in these cryptocurrency sectors. These developments are predominantly influenced by sentimental factors, often diverging from the trends of Bitcoin.

Suggested Citation

  • Samet Gunay & Emrah Ismail Cevik & Mehmet Fatih Bugan & Sel Dibooglu & Mehmet Akif Destek, 2025. "Time and frequency domain relationship between investor sentiment and sectoral cryptocurrencies," Economic Change and Restructuring, Springer, vol. 58(3), pages 1-32, June.
    • Handle: RePEc:kap:ecopln:v:58:y:2025:i:3:d:10.1007_s10644-025-09878-z
    DOI: 10.1007/s10644-025-09878-z
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