Social Network and Sentiment Contagion: Evidence from the Bitcoin Market

Bing Han (), Haoyang Liu () and Pengfei Sui ()
Additional contact information
Bing Han: https://www.rotman.utoronto.ca/the-rotman-experience/our-community/people/han-bing/

No 2605, Working Papers from Federal Reserve Bank of Dallas

Abstract: Using new data on social interactions and individual trading records in the Bitcoin market, we show that investor sentiment spreads across social connections. Investors systematically revise their beliefs about Bitcoin prices in the direction of average peer sentiment—even though that sentiment does not predict future prices. We document specific patterns in the diffusion of beliefs across networks, including evidence consistent with confirmation bias. Moreover, this social-sentiment contagion influences both individual trading decisions and overall market dynamics. Our novel measure of contagion intensity significantly forecasts Bitcoin volatility, trading volume and market crashes.

Keywords: social interactions; belief updating; sentiment contagion; bitcoin; bubbles (search for similar items in EconPapers)
JEL-codes: G11 G12 G41 G53 (search for similar items in EconPapers)
Pages: 62
Date: 2026-03-02
New Economics Papers: this item is included in nep-mst, nep-net, nep-pay and nep-soc
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.dallasfed.org/~/media/documents/research/papers/2026/wp2605.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:102864

Ordering information: This working paper can be ordered from

DOI: 10.24149/wp2605

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().