The psychology of cryptocurrency prices
Arash Aloosh () and
Finance Research Letters, 2020, vol. 33, issue C
This letter analyzes the dynamic of cryptocurrency prices through the lens of behavioral economics. Cryptocurrency market participants seem to behave irrationally. We provide evidence of the presence of significant small price bias for the cryptocurrency market, consistent with the hypothesis that investors react to the news differently according to the price-level. We find that low-priced cryptocurrencies are much more volatile than their high-priced counterparts.
Keywords: Investor psychology; Behavioral biases; Cryptocurrency; Price; Volatility (search for similar items in EconPapers)
JEL-codes: G41 G12 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:33:y:2020:i:c:s1544612318309036
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