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Can Bitcoin Investors Profit from Predictions by Crypto Experts?

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  • Gerritsen, Dirk F.
  • Lugtigheid, Rick A.C.
  • Walther, Thomas

Abstract

Using a hand-collected dataset containing bullish, neutral, and bearish predictions for Bitcoin published by crypto experts, we show that neutral and bearish predictions are followed by negative abnormal returns whereas bullish predictions are not associated with nonzero abnormal returns. Based on all outstanding predictions, we compute prediction revisions relative to (i) the latest issued prediction and (ii) the outstanding consensus prediction. Downward revisions are followed by negative abnormal returns. We conclude that crypto experts are skilled information intermediaries on the Bitcoin market.

Suggested Citation

  • Gerritsen, Dirk F. & Lugtigheid, Rick A.C. & Walther, Thomas, 2022. "Can Bitcoin Investors Profit from Predictions by Crypto Experts?," Finance Research Letters, Elsevier, vol. 46(PA).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003081
    DOI: 10.1016/j.frl.2021.102266
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    References listed on IDEAS

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    Cited by:

    1. André D. Gimenes & Jéfferson A. Colombo & Imran Yousaf, 2023. "Store of value or speculative investment? Market reaction to corporate announcements of cryptocurrency acquisition," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-31, December.
    2. Bonaparte, Yosef & Bernile, Gennaro, 2023. "A new “Wall Street Darling?” effects of regulation sentiment in cryptocurrency markets," Finance Research Letters, Elsevier, vol. 52(C).
    3. Soria, Jorge & Moya, Jorge & Mohazab, Amin, 2023. "Optimal mining in proof-of-work blockchain protocols," Finance Research Letters, Elsevier, vol. 53(C).
    4. Levkov Nikola & Bogoevska-Gavrilova Irena & Trajkovska Milica, 2022. "Profile and Financial Behaviour of Crypto Adopters – Evidence from Macedonian Population Survey," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 172-185, December.
    5. Tomas Pečiulis & Nisar Ahmad & Angeliki N. Menegaki & Aqsa Bibi, 2024. "Forecasting of cryptocurrencies: Mapping trends, influential sources, and research themes," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 43(6), pages 1880-1901, September.
    6. Jones, Michael & Luu, Truong (Jack) & Samuel, Binny, 2024. "The interdependence of financial literacy and crypto literacy," Economics Letters, Elsevier, vol. 239(C).

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    More about this item

    Keywords

    Bitcoin; Experts; Analysts; Market efficiency; Predictions; Forecasts; Cryptocurrencies;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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