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Spillovers between Bitcoin and Meme stocks

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  • Li, Shi

Abstract

This paper examines the spillover effect between Bitcoin and Meme stocks, the two types of assets heavily traded by retail investors. A unidirectional wealth transfer phenomenon from Meme stocks to Bitcoin is identified. Moreover, both past own volatility and volatility from Bitcoin contribute to Meme stocks’ current volatility. “Bad” news on the two assets affects not only themselves but also spillovers to each other. Our findings demonstrate the great risk of investment in Meme stocks and call for comprehensive protection for retail investors amid their growing active involvement in financial markets.

Suggested Citation

  • Li, Shi, 2022. "Spillovers between Bitcoin and Meme stocks," Finance Research Letters, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004238
    DOI: 10.1016/j.frl.2022.103218
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    References listed on IDEAS

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    Cited by:

    1. Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2023. "What do we know about meme stocks? A bibliometric and systematic review, current streams, developments, and directions for future research," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 589-602.
    2. Elsayed, Ahmed H. & Hoque, Mohammad Enamul & Billah, Mabruk & Alam, Md. Kausar, 2024. "Connectedness across meme assets and sectoral markets: Determinants and portfolio management," International Review of Financial Analysis, Elsevier, vol. 93(C).
    3. Yousaf, Imran & Pham, Linh & Goodell, John W., 2023. "The connectedness between meme tokens, meme stocks, and other asset classes: Evidence from a quantile connectedness approach," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).

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