Do online attention and sentiment affect cryptocurrencies’ correlations?

Article - Tuesday, 10 September 2024

Aslanidis, N., Bariviera, A.F. and Savva, C.S. (2024): "Do online attention and sentiment affect cryptocurrencies’ correlations?", Research in International Business and Finance

This study explores the daily patterns in major cryptocurrencies and how they relate to online investor behavior. The research reveals interesting connections between cryptocurrency correlations and the attention and sentiment expressed by investors on digital platforms.

The findings show that increased public attention to cryptocurrencies tends to strengthen the relationships between different digital currencies. However, the overall sentiment or mood of investors has an even more significant and negative impact on cross correlations.

These insights are valuable for both investors and regulators. For investors, understanding these patterns could help in creating more effective investment strategies and managing risk. For regulators, the study highlights how online discussions and sentiment can affect market stability in the cryptocurrency world.

By shedding light on the unique dynamics of cryptocurrency markets, this research contributes to our understanding of this evolving financial landscape and its connection to online behavior.