 Listening to the Market: Music sentiment and cryptocurrency returnsSinda Hadhri, Mehak Younus, Muhammad Abubakr Naeem and Larisa Yarovaya Journal of International Money and Finance, 2025, vol. 157, issue C Abstract: This paper investigates how investor sentiment, captured through a novel Spotify-based mood metric, influences the cross-sectional pricing of cryptocurrencies. Drawing on behavioral finance and psychological theories, we hypothesize that emotional states reflected in musical choices influence cryptocurrency returns. Using weekly data from 2,551 cryptocurrencies over five years, we find that sensitivity to music sentiment significantly predicts future returns. Our results reveal a negative relationship between music sentiment beta and near-term returns, with multivariate regressions confirming its explanatory power beyond traditional risk factors. We also uncover nonlinear and time-varying effects, consistent with sentiment-driven mispricing and investor attention cycles. This study offers a global sentiment measure, contributing to the understanding of mood-driven dynamics in speculative markets and informing trading strategies, policy, and research. Keywords: Music sentiment; Spotify; Investor mood; Cross-section of cryptocurrency returns; Return predictability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:157:y:2025:i:c:s0261560625001299 DOI: 10.1016/j.jimonfin.2025.103394 Access Statistics for this article Journal of International Money and Finance is currently edited by J. R. Lothian More articles in Journal of International Money and Finance from Elsevier |
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