The reversal in the cryptocurrency market before and during the Covid-19 pandemic: Does investor attention matter?
| Title: | The reversal in the cryptocurrency market before and during the Covid-19 pandemic: Does investor attention matter? |
|---|---|
| Authors: | Pham H; The Business School, RMIT University Vietnam, Ho Chi Minh City, Vietnam.; Tran TND; Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam.; Nguyen NTT; Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam.; Duong KD; Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam. |
| Source: | PloS one [PLoS One] 2024 Nov 27; Vol. 19 (11), pp. e0304377. Date of Electronic Publication: 2024 Nov 27 (Print Publication: 2024). |
| Publication Type: | Journal Article |
| Language: | English |
| Journal Info: | Publisher: Public Library of Science Country of Publication: United States NLM ID: 101285081 Publication Model: eCollection Cited Medium: Internet ISSN: 1932-6203 (Electronic) Linking ISSN: 19326203 NLM ISO Abbreviation: PLoS One Subsets: MEDLINE |
| Imprint Name(s): | Original Publication: San Francisco, CA : Public Library of Science |
| MeSH Terms: | COVID-19*/epidemiology ; COVID-19*/prevention & control ; COVID-19*/economics ; Pandemics*/economics ; Investments*/economics; SARS-CoV-2/isolation & purification ; Humans ; Attention |
| Abstract: | This study delves into the impact of reversals and investor attention on cryptocurrency returns before and during the COVID-19 pandemic. We employ the Two Stages Least Squares to analyze a sample of the top 20 cryptocurrencies from January 2016 to April 2021. Our results reveal that investor attention positively influences bitcoin returns in both periods, with a more pronounced effect during the pandemic. Conversely, reversals demonstrate a positive correlation with cryptocurrency returns before the outbreak but a negative relationship during the pandemic. Our robustness test further indicates that investor attention positively affects the returns of small and medium-cap cryptocurrencies, while reversals only exhibit positive consequences for small-cap cryptocurrencies. Additionally, our findings highlight stablecoins as a safe haven during the epidemic. The results suggest that investor attention has little influence on the returns of stablecoins, indicating that these coins are primarily resistant to market sentiment due to their inherent stability. The negative impact of the pandemic on the crypto market demonstrates a downward trend through each wave. Despite aligning with attention-induced price pressure and behavioral finance hypotheses, our results do not support efficient market theory or the notion of heterogeneity among investors. This research provides valuable insights for investors and policymakers in devising effective strategies for the cryptocurrency market.; (Copyright: © 2024 Pham et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.) |
| Competing Interests: | The authors have declared that no competing interests exist. |
| References: | Financ Res Lett. 2021 Jan;38:101701. (PMID: 32837381); Res Int Bus Finance. 2020 Dec;54:101248. (PMID: 34170988); Chaos Solitons Fractals. 2022 Sep;162:112443. (PMID: 36068915); PLoS One. 2023 Mar 27;18(3):e0281023. (PMID: 36972225) |
| Entry Date(s): | Date Created: 20241127 Date Completed: 20241127 Latest Revision: 20241130 |
| Update Code: | 20260130 |
| PubMed Central ID: | PMC11602072 |
| DOI: | 10.1371/journal.pone.0304377 |
| PMID: | 39602459 |
| Database: | MEDLINE |
Journal Article