The Role of Twitter in Cryptocurrency Pump-and-Dumps

David Ardia and Keven Bluteau

Papers from arXiv.org

Abstract: We examine the influence of Twitter promotion on cryptocurrency pump-and-dump events. By analyzing abnormal returns, trading volume, and tweet activity, we uncover that Twitter effectively garners attention for pump-and-dump schemes, leading to notable effects on abnormal returns before the event. Our results indicate that investors relying on Twitter information exhibit delayed selling behavior during the post-dump phase, resulting in significant losses compared to other participants. These findings shed light on the pivotal role of Twitter promotion in cryptocurrency manipulation, offering valuable insights into participant behavior and market dynamics.

Date: 2023-06
New Economics Papers: this item is included in nep-fmk, nep-mfd, nep-mst and nep-pay
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