Download This PaperThe Effects of Covid-19 and the Increasing Relationship between Individual Investor Sentiment, Cryptocurrencies, and the U.S. Market.
Rodriguez-Nieto, J. A. & Eremina, K. (2024). The Effects of COVID-19 and the Increasing Relationship between Individual Investor Sentiment, Cryptocurrencies, and the U.S. Market. Academy of Economics and Finance Journal. 14(2024).
13 Pages Posted: 22 Feb 2024 Last revised: 29 Feb 2024
Date Written: September 15, 2023
Abstract
This research analyzes the effect of the COVID-19 pandemic on the relationship between individual (retail) investor sentiment, cryptocurrencies, and the U.S. stock market. Using the DCC-GARCH model, we obtain the dynamic conditional correlations between Bitcoin, Ethereum, Individual Investor Sentiment, VIX, and the U.S. stock market before and during the pandemic. We use the DCC-GARCH model to identify the increasing relationship between individual investor sentiment and the U.S. Stock market performance. This paper sheds light on the growing significance and influence of individual (retail) investors in the U.S. stock and cryptocurrency markets, with the COVID-19 pandemic catalyzing this accelerated influence.
Keywords: Cryptocurrencies, COVID-19, Stock Market, Retail Investor
JEL Classification: G01, F65
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