Small price bias in the cryptocurrency market. A cognitive bias revealed by emotions on social networks

Adriana García Londoño and Santiago Alonso Díaz

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: Cognitive biases influence cryptocurrency market outcomes. Of relevance for this work, investors react variably to low-priced cryptocurrencies, evident in market outcomes like volatility. We investigate whether low prices also drive emotional responses on Twitter. Results show emotions align with price levels, with stronger reactions to lower prices. We conclude that small prices affect investor emotions.

Keywords: Behavioral Finance; Information, knowledge, and uncertainty; Role and effects of psychological, emotional, social, and cognitive factors on decision making; Cryptocurrencies; Small price bias; Cognitive biases; Number cognition (search for similar items in EconPapers)
JEL-codes: D8 D91 G4 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pa:s154461232401170x

DOI: 10.1016/j.frl.2024.106141

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