Does Google Trend Affect Cryptocurrency? An Application of Panel Data Approach

Title

Does Google Trend Affect Cryptocurrency? An Application of Panel Data Approach

Creator

Verma R.; Sam S.; Sharma D.

Description

Cryptocurrency has emerged globally as the most profitable investment asset of the decade. The media exposure and reportage on cryptocurrency are frequent, and it seems that prices of cryptocurrencies could only rise higher. In today's digital world, any individual's first go-to information-seeking platform is the Google search engine. Thus, it is imperative to understand how Google's search trend affects an investable asset and its market as a whole. Researchers have explored varied sentiment measurement proxies such as news coverage, Facebook and Twitter posts, and, most importantly, Google searches. Numerous research studies show increasing interest in Google search volume and its predictive ability to understand investment returns and economic outcomes. In a behavioural finance context, the present research uses Pearson's correlation and panel regression to examine the association of cryptocurrency returns (Bitcoin, Ethereum, and Ripple) and their varied characteristics with the Google search intensity. The study's findings reveal that investors searching for information on Cryptocurrency online drive the price increase in cryptocurrency and push the trading volume up and increase the volatility of the cryptocurrency returns. Furthermore, investor sentiment has a statistically significant impact on cryptocurrencies' trading volume and weekly volatility in periods of high or greedy investor sentiment. The findings imply that the 'price pressure hypothesis' given by Barber and Odean (2008) as a stock market research finding is also present in the cryptocurrency market. 2023 SCMS Group of Educational Institutions. All rights reserved.

Source

SCMS Journal of Indian Management, Vol-20, No. 2, pp. 124-132.

Date

2023-01-01

Publisher

SCMS Group of Educational Institutions

Subject

Cryptocurrency; Google trends; Investor attention; Trading volume; Volatility

Coverage

Verma R., Department of Financial Administration, Central University of Punjab, India; Sam S., School of Business and Management, Christ (Deemed-to-be-University), Bangalore, India; Sharma D., Department of Financial Administration, Central University of Punjab, Bhatinda, 151001, India

Rights

Restricted Access

Relation

ISSN: 9733167

Format

Online

Language

English

Type

Article

Identifier

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85168088614&partnerID=40&md5=d1b3552ead5095d87d02b65c6f627629