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The Effect of Information Asymmetry on Investment Behavior in Cryptocurrency Market

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Title:The Effect of Information Asymmetry on Investment Behavior in Cryptocurrency Market
Authors:Park, Minjung
Chai, Sangmi
Keywords:Distributed Ledger Technology, The Blockchain
information asymmetry
investor sentiment
probability of informed trading (pin)
Date Issued:07 Jan 2020
Abstract:With the increase in the attention to cryptocurrency, studies on the factors affecting the price fluctuation of cryptocurrency have been actively conducted. Prior researches suggested that policy announcements (i.e., public information) related to cryptocurrency have been found to affect the price volatility in the market in particular. Privileged information, which is hard to be observable unlike public information published by the government or corporations, is hardly homogenously distributed to individual investors. However, it inevitably affects the price in any market. Therefore, this study aims to identify the information asymmetry, which is mainly formed by privileged information, in the cryptocurrency market. Moreover, this study examines whether investment sentiment, which mainly influences transaction behaviors of uninformed traders, has a significant effect on the cryptocurrency market as well. The results contribute to the understanding of the cryptocurrency market in a basis of the existing market theories.
Pages/Duration:10 pages
Rights:Attribution-NonCommercial-NoDerivatives 4.0 International
Appears in Collections: Distributed Ledger Technology, The Blockchain

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