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COVID-19 Attention, Cultural Individualism, and Bitcoin Returns

Article arXiv papers · Author: Huaxin Wang-Lu
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Summary

This paper examines whether public attention to COVID-19 helps explain Bitcoin returns, and whether the relationship differs between countries with individualistic and collectivistic traditions. It analyzes eight large economies over the period from February 11, 2020, to May 9, 2022. The study uses rolling and recursive-evolving procedures to account for country-specific timing in pandemic concerns and to address potential estimation bias associated with variation in Google search sampling.

The reported general finding is that attention in collectivistic countries has stronger causal impacts on Bitcoin returns than attention in individualistic countries, based on Granger-causality analysis. This is an observed statistical relationship in the stated sample and period; the description does not establish a causal mechanism or show whether it persists outside that period. It also gives no effect sizes or details on market controls, limiting assessment of practical trading implications.

Key ideas

  • The study tests whether COVID-19 public attention Granger-causes Bitcoin returns.
  • It compares attention in countries characterized as individualistic or collectivistic.
  • Rolling and recursive procedures address timing differences and Google sampling variation.
  • The analysis covers eight large economies from February 2020 through May 2022.
  • The reported relationship is stronger for collectivistic countries, but the abstract does not establish a causal mechanism.

Tags

CryptoSentimentStatisticsEvent-driven
Full text
# Bitcoin Returns and Public Attention to COVID-19: Do Timing and Individualism Matter?


# Bitcoin Returns and Public Attention to COVID-19: Do Timing and Individualism Matter?









The evolution of the pandemic and people's concern over it have an impact on the Bitcoin market, while the extent of individualism could differentiate investor behaviors in the financial market during the pandemic. This paper examines whether public attention to COVID-19 in individualistic countries versus collectivistic countries Granger causes Bitcoin returns between February 11, 2020 and May 09, 2022. To this end, eight large economies with a individualistic or collectivistic tradition are chosen for analyses. By using rolling and recursive-evolving algorithms, it accounts for the timing of COVID-19 issues that vary by country and circumvents the potential estimation bias that a traditional Granger causality test may suffer due largely to Google's sampling variation for different time frames. In general, collectivistic countries are found to have stronger causal impacts on Bitcoin returns than individualistic countries.

Shown in full with attribution under the source's licence. Licence: abstract CC0

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.