Psychological barriers in the cryptocurrency market

• Type: Article in International Scientific Journal
• Date: 2020

Authors

Vítor Fonseca (Author) FEP; Luís Pacheco (Author) Other; Júlio Lobão (Author) FEP

Journal

Title: Review of Behavioral Finance

Vol. 12 No. 2

Pages: 151-169

ISSN: 1940-5979

Publisher: Emerald

Indexing

ISI Web of Knowledge - 12 Citations

ISI Web of Science

Scopus - 13 Citations

ProQuest

INSPEC

Business Source Complete (EBSCO)

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics > Financial science

Other information

Authenticus ID: P-00R-1K6

DOI: 10.1108/RBF-03-2019-0041

Abstract (EN): Abstract Purpose The purpose of this paper is to study the existence of psychological barriers in cryptocurrencies. Design/methodology/approach To detect psychological barriers, the authors perform a uniformity test, a barrier hump test, a barrier proximity test and conditional effects test to a sample comprised by the daily closing quotes of six of the most liquid cryptocurrencies. Findings The results evidence the existence of psychological barriers in four of the cryptocurrencies under scrutiny, namely, Bitcoin, Dash, NEM and Ripple. Practical implications The fact that the cryptocurrency market has a high share of unexperienced investors and presents several cases of psychological barriers is consistent with the hypothesis that that class of investors is particularly prone to the behavioral biases which cause psychological barriers. Originality/value This paper studies, for the first time, the existence of psychological barriers in the market of cryptocurrencies.

Language: English

Type (Professor's evaluation): Scientific