Bitcoin Price Co-Movements and Culture

Guglielmo Maria Caporale and Woo-Young Kang

No 8076, CESifo Working Paper Series from CESifo

Abstract: This paper analyses the cultural drivers (tightness−looseness and individualism−collectivism) of Bitcoin prices co-movements and exchange shutdowns in 34 major countries around the world over the period 20 July 2010 – 5 February 2020. Under the assumption that investors prefer to use local or international Bitcoin exchanges accepting the local currency to trade, we find that Bitcoin prices co-move more in countries with tighter and more collectivistic cultures. However, greater connectivity between international Bitcoin exchanges in the form of financial openness reduces the impact of the cultural variables on the behaviour of investors and on Bitcoin price co-movements. Further, the probability of Bitcoin exchanges shutdowns is higher in tighter and more collectivistic cultures where investors are more risk-averse and thus more likely to exhibit herding behaviour.

Keywords: Bitcoin exchanges; cultural analysis; co-movement (search for similar items in EconPapers)
JEL-codes: C36 G15 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-pay
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Citations: View citations in EconPapers (1)

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