Events

Prof. Bing Han
Professor of Finance
Joseph L. Rotman School of Management
University of Toronto and Chinese University of Hong Kong

Using novel data on social interactions and individual trading records in the Bitcoin market, we document evidence of social learning leading to sentiment contagion. Investors significantly update their beliefs about Bitcoin in the same direction as the average peer sentiment, although it is not informative about future prices. Our findings indicate inefficiency in social learning, consistent with the echo chamber effect and selective interpretation of signals. Moreover, social learning affects both individuals’ trading decisions and aggregate market outcomes. We construct a novel measure for the intensity of sentiment contagion resulting from social learning, which significantly predicts Bitcoin volatility, volume, and crash.