An Empirical Study on Herd Behavior in Cryptocurrency Trading

【Author】 Liu, Zhunzhun; Zhang, Ruidong

【Source】JOURNAL OF COMPUTER INFORMATION SYSTEMS

【影响因子】3.317

【Abstract】In recent years cryptocurrency trading has been very active and received attention from worldwide investors. Given its short history and lack of effective regulatory frameworks, cryptocurrency trading is still like the wild west. This study selected the top 21 dominant cryptocurrencies to analyze the trading behavior associated with them over the period from 2016 to May 2023. We adopted the cross-sectional absolute deviations (CSAD) model to investigate investors' trading behavior. Two calculation methods are used: the capitalization-weighted method and the equally weighted method. Our analysis results have indicated that no matter which calculation method is used, the cryptocurrency marketplace has shown strong and significant herd behavior from 2016 to March 12, 2020. However, significant herd behavior couldn't be detected after March 12, 2020. This is a very interesting and yet important finding from our study. The implication is that March 12, 2020 appeared to be a turning point where important market conditions might have changed, such as the dominant cryptocurrency trading force has transformed from individuals to institutional investors.

【Keywords】Herd behavior; cryptocurrency; crypto trading behavior; CSAD; retail and institutional investors

【发表时间】2023 2023 JUN 26

【收录时间】2023-07-14

【文献类型】实证数据

【主题类别】

区块链治理-市场治理-市场分析