IDEAS home Printed from https://ideas.repec.org/a/taf/hbhfxx/v24y2023i2p202-218.html
   My bibliography  Save this article

Does Sentiment Impact Cryptocurrency?

Author

Listed:
  • Anamika
  • Madhumita Chakraborty
  • Sowmya Subramaniam

Abstract

This study examines the impact of investor sentiment on cryptocurrency returns. We use a direct survey-based measure that captures the investors’ sentiment on Bitcoins. This direct measure of Bitcoin investor sentiment is obtained from the Sentix database. The results of the study found that the Bitcoin prices experience appreciation when investors are optimistic about Bitcoin. Bitcoin sentiment has significant power in predicting the Bitcoin prices after controlling for the relevant factors. There is also evidence that the sentiment of the dominant cryptocurrency, i.e., Bitcoin, influences the price of other cryptocurrencies. Further, we extend our analysis by investigating the impact of equity market sentiment on cryptocurrency returns. We proxy equity market sentiment using two measures viz: Baker-Wurgler sentiment Index and the VIX Index. When the equity market investors’ sentiment is bearish, cryptocurrency prices rise, indicating that cryptocurrency can act as an alternative avenue for investment. Our results remain unaffected after controlling for potential factors that could impact cryptocurrency prices.

Suggested Citation

  • Anamika & Madhumita Chakraborty & Sowmya Subramaniam, 2023. "Does Sentiment Impact Cryptocurrency?," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 24(2), pages 202-218, April.
    • Handle: RePEc:taf:hbhfxx:v:24:y:2023:i:2:p:202-218
    DOI: 10.1080/15427560.2021.1950723
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15427560.2021.1950723
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15427560.2021.1950723?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Superchi, Francesco & Mati, Alessandro & Carcasci, Carlo & Bianchini, Alessandro, 2023. "Techno-economic analysis of wind-powered green hydrogen production to facilitate the decarbonization of hard-to-abate sectors: A case study on steelmaking," Applied Energy, Elsevier, vol. 342(C).
    2. Elie Bouri & Matteo Foglia & Sayar Karmakar & Rangan Gupta, 2024. "Return-Volatility Nexus in the Digital Asset Class: A Dynamic Multilayer Connectedness Analysis," Working Papers 202432, University of Pretoria, Department of Economics.
    3. Mercik, Aleksander & Słoński, Tomasz & Karaś, Marta, 2024. "Understanding crypto-asset exposure: An investigation of its impact on performance and stock sensitivity among listed companies," International Review of Financial Analysis, Elsevier, vol. 92(C).
    4. Yongzhi Gong & Xiaofei Tang & En-Chung Chang, 2023. "Group norms and policy norms trigger different autonomous motivations for Chinese investors in cryptocurrency investment," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    5. Chowdhury, Md Iftekhar Hasan & Hasan, Mudassar & Bouri, Elie & Tang, Yayan, 2024. "Emotional spillovers in the cryptocurrency market," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    6. Abderahman Rejeb & Karim Rejeb & Khalil Alnabulsi & Suhaiza Zailani, 2023. "Tracing Knowledge Diffusion Trajectories in Scholarly Bitcoin Research: Co-Word and Main Path Analyses," JRFM, MDPI, vol. 16(8), pages 1-23, July.

    More about this item

    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:taf:hbhfxx:v:24:y:2023:i:2:p:202-218. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/hbhf .

    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.