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Emotions in the crypto market: Do photos really speak?

Finance Research Letters, ISSN: 1544-6123, Vol: 55, Page: 103945
2023
  • 4
    Citations
  • 0
    Usage
  • 44
    Captures
  • 0
    Mentions
  • 323
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    4
    • Citation Indexes
      4
  • Captures
    44
  • Social Media
    323
    • Shares, Likes & Comments
      323
      • Facebook
        323

Article Description

This study examines whether the emotions contained in new photos can affect the cryptocurrency market. Utilizing the daily data on top 100 cryptocurrencies, we find that the surge in ratio of photos comprising pessimistic tones is associated with negative coin returns. Photo sentiment positively predicts subsequent returns and trading intensity, implying the subsequent corrections. The photo sentiment also drives risks up with higher price volatilities. The predictive power is more pronounced during periods of elevated fear proxied by investors’ risk aversion. Our results remain robust with alternative sentiment proxies, risk-adjusted returns, and a battery of subsample analyses.

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