- A working paper circulated by US-based think tank National Bureau of Economic Research suggests that unlike traditional financial markets,
- Notably, the paper formulates certain parameters which can be used to predict the returns on coins like Bitcoin, XRP and Ethereum
- States that a one-standard-deviation increase in the Google search for Bitcoin yields a 2.3 percent increase in the next two weeks.
- The paper suggests that negative investor attention adversely affects prices of cryptocurrencies and thus returns. A one-standard-deviation increase in a Google search for 'Bitcoin hack' leads to 2.75 percent decrease in bitcoin returns the following week.
- At the same time, cryptocurrencies comprise an asset class which is radically different from traditional asset classes,” Liu and Tsyvinski stated.
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