The Psychology of Cryptocurrency Prices

9 Pages Posted: 3 Jan 2019 Last revised: 16 May 2019

See all articles by Arash Aloosh

Arash Aloosh

Neoma Business School

Samuel Ouzan

Neoma Business School

Date Written: May 8, 2019

Abstract

This letter analyzes the dynamic of cryptocurrency prices through the lens of behavioral economics. Cryptocurrency market participants seem to behave irrationally. We provide evidence of the presence of significant small price bias for the cryptocurrency market, consistent with the hypothesis that investors react to the news differently according to the price-level. We find that low-priced cryptocurrencies are much more volatile than their high-priced counterparts.

Keywords: Investor Psychology; Behavioral Biases; Cryptocurrency; Price; Volatility

JEL Classification: G41; G12

Suggested Citation

Aloosh, Arash and Ouzan, Samuel, The Psychology of Cryptocurrency Prices (May 8, 2019). Available at SSRN: https://ssrn.com/abstract=3302680 or http://dx.doi.org/10.2139/ssrn.3302680

Arash Aloosh (Contact Author)

Neoma Business School ( email )

1 Rue du Mar├ęchal Juin,
Mont Saint Aignan, 76130
France
+33232824736 (Phone)

Samuel Ouzan

Neoma Business School ( email )

1 Rue du Mar├ęchal Juin
Mont Saint Aignan Cedex, 76825
France

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