Does the cryptocurrency market exhibits feedback trading?

Paulo Vitor Jordão da Gama Silva (), Augusto Neto (), Marcelo Klotzle, Antonio Carlos Figueiredo pinto () and Leonardo Gomes ()
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Paulo Vitor Jordão da Gama Silva: Pontifical Catholic University of Rio de Janeiro
Augusto Neto: PUC-RIO
Antonio Carlos Figueiredo pinto: Pontifical Catholic University of Rio de Janeiro
Leonardo Gomes: Professor at IAG/PUC-RIO

Economics Bulletin, 2019, vol. 39, issue 4, 2830-2838

Abstract: Research has shown that behavioral anomalies affect investors' choices and decisions in the financial markets. One such behavioral anomaly is feedback trading, a phenomenon wherein the investor uses past data to make future decisions. Using Sentana and Wadhwani's (1992) methodology, the 50 most liquid digital currencies (with the most extensive daily data reporting) were analyzed during the period 2013–2018. Results analysis suggests negative feedback trading in Tether Dollar and positive feedback trading in Bitcoin, Ethereum, CassinoCoin and ECC.

Keywords: Cryptocurrency; Feedback Trading; Behavioral Finance (search for similar items in EconPapers)
JEL-codes: F3 G1 (search for similar items in EconPapers)
Date: 2019-12-11
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Citations: View citations in EconPapers (4)

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